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Alex White Holdings Limited - Acquisition Of A Fischer & Krecke 16s Flexographic
Press
ALEX WHITE HOLDINGS LIMITED
(Registration number 1949/035016/06)
Share code: ALX
ISIN: ZAE 000000386
("Alex White" or "the company")
ACQUISITION OF A FISCHER & KRECKE 16s FLEXOGRAPHIC PRESS
1. Introduction
Further to the cautionary announcement that was released on SENS on 22 January
2004 and published in the press on 23 January 2004, shareholders are advised
that subject to certain conditions precedent, Cape Wrappers (Pty) Ltd ("Cape
Wrappers"), a wholly owned subsidiary of the company has entered into an
agreement to acquire a Fischer & Krecke 16s Flexographic Press.("the new
press")("the acquisition"). The company is, simultaneously with acquisition of
the the press, investigating the disposal of its existing 8 colour Fischer &
Krecke 34DF press ("the disposal").
2. The acquisition
2.1 Rationale
The purchase would enhance the business opportunities of Cape Wrappers (Pty) Ltd
by opening up markets that it had previously been unable to supply as a result
of the constraints placed on manufacture by existing presses. These
opportunities exist within the short run orders that require quick change over
times and varied repeat lengths of flexible packaging.
It is Alex White Holdings" intention to increase market share and turnover in
the business areas in which it operates, thereby enhancing its value to
shareholders and improving its long-term viability in the flexible packaging
market.
Purchase consideration and payment
The total cost of the new press, including local costs of installation, amounts
to R 21 717 000.
Cape Wrappers has entered into an agreement with WesBank, in terms of which
WesBank will finance R 18 584 597 of the total cost above.
The balance of the total cost of R 3 132 403 will be funded by the company from
its own resources.
2.3 Effective date
The press will be operational by 30 June 2004.
2.5 Conditions precedent
The acquisition and disposal are subject to ratification and approval of the
shareholders in general meeting.
3. Financial effects
The pro forma financial effects of the acquisition for the six months ended 31
December 2003 are set out below. The following table has been prepared for
illustrative purposes only and is based on the published interim results of the
company for the six months ended 31 December 2003.
Before the After the Percentage
acquisition acquisition change
(cents) (cents) (%)
Earnings per ordinary share 12,5 13,1 4,8%
Headline earnings per share 11,9 12,5 4,8%
Net asset value per ordinary share 209 209 0,0%
Net tangible asset value per
ordinary share 204 204 0,0%
The after acquisition earnings assumes the following:
the interest and depreciation costs of the new press are included as if the
press was acquired on 1 July 2003 and:
R 6 000 000 additional revenue is generated by the new press for the six month
period.
4. Withdrawal of cautionary announcement
Shareholders are advised that a circular will be posted to them shortly and
caution is no longer required to exercised by shareholders when dealing in their
Alex White securities.
Johannesburg
15 April 2004
Sponsor Independent reporting Accountants
Sasfin Corporate
Finance Horwath Leveton Boner
a Division of Chartered Accountants (SA)
Sasfin Bank Limited
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