| Tue 28 Oct 2003, 14:12 | | ACQUISITION OF THE BUSINESS OF DELKOR INVESTMENT H |
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IST - ACQUISITION OF THE BUSINESS OF DELKOR INVESTMENT HOLDINGS (PROPRIETARY)
LIMITED
IST GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/011521/06)
Share code: IST
ISIN: ZAE000015798
("IST")
ACQUISITION OF THE BUSINESS OF DELKOR INVESTMENT HOLDINGS (PROPRIETARY) LIMITED
1. Introduction
Shareholders are advised that IST has entered into an agreement to acquire the
business of Delkor Investment Holdings (Proprietary) Limited ("Delkor")
(situated in Sandton, Johannesburg) from the shareholders of that company ("the
acquisition"). The management team of Delkor, including the Chief Executive
Officer and the Marketing Director, will be involved in the future operations.
2. Rationale for the acquisition and nature of business
This acquisition was targeted in line with a strategic goal set some time ago to
acquire synergistic businesses which have an established client base, a
portfolio of leading edge products, a track record of profitable operations, and
good future prospects.
Delkor specialises in the supply of mineral processing and liquid/solid
separation equipment and has built up an excellent reputation since its
inception in 1974 in the mining, metallurgical, sewage, wastepaper, pulp and
paper, food and chemical industries on an international basis. The operations
of Delkor will be merged with the business of IST Industrial which has an
established footprint in the same markets.
3. Consideration for the acquisition
The consideration for the purchase of the business is R33 million, which will be
funded through IST"s cash reserves. Payment will be effected on the effective
date, being when all suspensive conditions have been met. Net assets acquired
in terms of this transaction attributable to Delkor amounted to R18 million at
the effective date.
4. Financial effects of the acquisition
Based on the audited results of IST for the year ended 28 February 2003 and the
unaudited results for the 6 months ended 31 August 2003, the pro forma financial
effects of the acquisition are set out below. This pro forma financial
information has been prepared for illustrative purposes only and because of its
nature may not give a true picture of IST"s financial position and results of
operations, nor the effect and impact of the acquisition on IST going forward.
Pro forma financial effects of the acquisition on the results of IST for the
year ended 28 February 2003
Before After
the the %
acquisition acquisition Change
(1) (2)
Basic earnings per
share (cents) 18.6 24.4(6)+(7) 31.2
Fully diluted earnings
per share (cents) 15.1 19.8(6)+(7) 31.1
Basic headline earnings
per share (cents) 19.8 25.6(6)+(7) 29.3
Fully diluted headline
earnings per share
(cents) 16.1 20.8(6)+(7) 29.2
Net asset value per
share (cents) 103.5 103.5(5) 0.0
Net tangible asset value
per share (cents) 101.5 87.6(5) (13.7)
Borrowings: Total fixed
assets 3% 3% 0.0
Weighted number of shares
in issue (000) 119 584 119 584 0.0
Consolidated number of
shares in issue (000) 119 584 119 584 0.0
Fully diluted number of
shares in issue (000) 147 159 147 159 0.0
Pro forma financial effects of the acquisition on the results of IST for the 6
months ended 31 August 2003
Before After
the the %
acquisition acquisition Change
(3) (4)
Basic earnings per
share (cents) 10.6 13.2(6)+(7) 24.5
Fully diluted earnings
per share (cents) 9.4 11.8(6)+(7) 25.5
Basic headline earnings
per share (cents) 10.2 12.9(6)+(7) 26.5
Fully diluted headline
earnings per share (cents) 9.1 11.4(6)+(7) 25.3
Net asset value per share
(cents) 103.4 103.4(5) 0.0
Tangible net asset value
per share (cents) 89.7 76.8(5) (14.4)
Borrowings: Total fixed
assets 3% 3% 0.0
Weighted number of shares
in issue (000) 129 523 129 523 0.0
Consolidated number of
shares in issue (000) 129 523 129 523 0.0
Fully diluted number of
shares in issue (000) 145 864 145 864 0.0
Notes
1. Based on the published consolidated audited results of IST for the year
ended 28 February 2003;
2. The effects on earnings per share and headline earnings per share are based
on the assumption that the business was acquired and that settlement of the
consideration took place on 1 March 2002;
3. Based on the published consolidated unaudited results of IST for the 6
months ended 31 August 2003;
4. The effects on earnings per share and headline earnings per share are based
on the assumption that the business was acquired and that settlement of the
consideration took place on 1 March 2003;
5. The effects on the net asset value per share and tangible net asset value
per share are based on the assumption that the business was acquired and that
settlement of the consideration took place on 28 February 2003 and 31 August
2003 respectively.
6. Earnings and headline earnings have been adjusted to include the income
attributable from Delkor to IST. This amount was arrived at by including
Delkor"s audited net profit after tax for the year ended 31 May 2003 of R12 019
973, and by pro-rating it for a six-month period, in order to make it comparable
to IST"s most recent reporting periods.
7. Earnings and headline earnings have also been adjusted to take into account
the decrease in interest income, calculated at an average after tax rate of 8.4%
for the respective period, as a result of the consideration paid out of cash
reserves.
5. Conditions precedent of the acquisition
Except for approval from the Competitions Commission all other conditions
precedent of the acquisition have been fulfilled.
6. Categorisation of the acquisition
The acquisition of the business of Delkor Investment Holdings (Proprietary)
Limited has been categorised as a category 3 transaction in terms of section 9.5
(a) of the JSE Listings Requirements.
7. Withdrawal of cautionary
IST hereby withdraws the cautionary statement issued on 4 August 2003.
Pretoria
28 October 2003
Investment bank and sponsor
Nedbank Corporate
IST
Acquisition of Delkor Investment
Holdings (Proprietary) Limited
Categorisation workings
Notes R
1. MARKET CAP WORKINGS
Shares in issue 143,490,000
LESS:
Treasury shares 1,283,607
LESS:
Shares held by share trust 2,331,900
Number of shares for use in 139,874,493
categorisation workings
Share price at 22 Oct 2003 - cents 141
per share
Market cap 197,223,035
2. CATEGORISATION WORKINGS
Transaction value 33,000,000
Category % 16.7%
Category _____
Date: 28/10/2003 02:00:30 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
