| Mon 16 Aug 2004, 13:27 | | Acquisition Of 100% Of The Shares In And Claims A |
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Casey - Acquisition Of 100% Of The Shares In And Claims Against DataPro
An Issue Of Shares For Cash,
Introduction Of An Additional Empowerment Shareholder,
Proposed Change Of Name And Transfer To The Alternative Exchange; And
Withdrawal Of Cautionary Announcement
CASEY INVESTMENT HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration No: 1998/016433/06)
Share code: CSY ISIN code: ZAE000016127
(`Casey` or `the company`)
ACQUISITION OF 100% OF THE SHARES IN AND CLAIMS AGAINST DATAPRO (PROPRIETARY)
LIMITED (`DataPro`), AN ISSUE OF SHARES FOR CASH, INTRODUCTION OF AN ADDITIONAL
EMPOWERMENT SHAREHOLDER, PROPOSED CHANGE OF NAME AND TRANSFER TO THE ALTERNATIVE
EXCHANGE AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Introduction
Following the cautionary announcement published on 30 June 2004, the directors
are pleased to announce that, in terms of two agreements signed on 13 August
2004, Casey has acquired 100% of the preference shares in and claims against
DataPro, a first tier Internet Service Provider (`ISP`), from BOE Private Equity
Investments (Proprietary) Limited (`BOE`) and 100% of the ordinary shares in and
claims against DataPro, from DataPro management comprising primarily Douglas
Reed (53%) with the balance being widely held by management and staff. This
will result in Casey holding 100% in DataPro. The effective date of the
transaction is 01 March 2004.
As previously announced on 30 June 2004 the directors of Level 4 Group Holdings
Limited (`Level 4`) acquired 56 234 723 shares, being control of 75% of Casey
from Black Information Technology Empowerment Company Limited (`Blitec`) as well
as Blitec`s loan account claims against Casey, with effect from 01 March 2004.
Blitec has retained a shareholding of approximately 12% in Casey. The listing
of Level 4 on AltX was approved by the AltX Advisory Committee ahead of the
acquisition of control of Casey, subject to JSE approval. During the run up to
the formal AltX approval, the Level 4 directors acquired a controlling interest
in Casey with an intention to reverse list Level 4 into the Casey shell in order
to achieve spread of shareholders and secure a value-adding black empowerment
company in the form of Blitec. The Level 4 business and contracts have been
introduced into Casey without any dilution to minority shareholders of Casey.
At the same time, the Level 4 directors entered into negotiation with DataPro
management and BOE for the acquisition of 100% of DataPro by Casey.
Level 4 is a specialist solution provider in the outsourcing arena, an area of
business familiar to Casey. Casey also provided Internet service and hosting
solutions to customers. Level 4 has been in business for a number of years, is
profitable and has a strong SME customer base with an annuity income stream in
terms of signed service level agreements or licence fees. Level 4 has had a
long term relationship with DataPro both at director level and at a business
level. It is the intention going forward that Level 4 will become the
outsourcing division of DataPro but will retain the brand name of Level 4.
DataPro will leverage off Level 4`s expertise in the SME sector, currently the
highest growth component of the Internet Service Provision arena.
DataPro is an ISP which primarily provides permanent Internet service connection
through leased lines or ADSL to businesses. The company is currently rated
amongst the top five South African first tier ISPs. DataPro has been built off
a lean capital base, which required the business to operate more effective and
efficiently. It has a substantial customer base, one of the most advanced
networks in the world and provides a basket of communication products and
services. DataPro currently services businesses of all sizes. In Gauteng the
customer base consists predominately of mid-sized corporate companies, and in
the Cape Town and Durban regions, small to medium enterprises. The largest
portion of DataPro`s business is annuity based income spread over a wide
customer base comprising well over 3 000 customers.
DataPro also provides other services such as the recently launched Voice-Over-IP
through leading Telecommunication companies, which secures another source of
recurring monthly revenue. Voice-Over-IP has huge potential for growth once
the market liberalises and voice and data technologies converge. All DataPro`s
Voice solutions are branded and sold under Vox Telecom and include cellular
least cost routing, implementing VOIP PBX`s and telephone management systems.
DataPro is one of the few niche telecommunications companies in South Africa
that has its own infrastructure.
The rationale for the acquisition of DataPro is to integrate the
telecommunications and micro outsourcing businesses, thereby offering a complete
solution to the combined customer base and to rapidly expand the business,
bringing a high level of annuity income, profitability and cash flow to the
group.
The acquisition and issue of shares for cash (`the transactions`)
The purchase price for the acquisition of the ordinary shares and claims from
DataPro management, equating to an effective 13,573% shareholding in DataPro, is
R5 653 650, to be settled through the issue of 66 500 000 new shares in Casey at
8,5 cents per share.
The purchase price for the acquisition of the preference shares and claims from
BOE, equating to an effective 86,427% shareholding in DataPro, is R36 000 000,
to be settled in cash. A bank guarantee has been put in place for the purchase
price and the minimum cash requirement has been secured through irrevocable
undertakings to subscribe for an issue of up to 87 500 000 new shares in Casey
at an issue price of 55 cents per share, subject to the approval of the
acquisition and issue of shares for cash by the shareholders of Casey in general
meeting. Irrevocable undertakings to vote in favour of the transactions of 56
234 723 shares or 75% of the existing issued share capital of Casey have been
secured.
The issue of shares for cash requires a prospectus to be issued which will be
enclosed with the circular to shareholders. The acquisition of DataPro will
require details of revised listing particulars which will be included in the
said prospectus. The transactions will not result in a change in control of
Casey. The largest shareholder in Casey, after the share issues, will be
Vantage Capital Group (Proprietary) Limited, a black economic empowerment
company, at approximately 23% assuming all the shares for cash are placed.
There are no agreements, arrangements or undertakings between any of the parties
to these transactions that will result in shareholders, acting in concert,
controlling 35% or more of the voting securities of Casey.
The combined financial effect of the transactions on the published unaudited
financial information of Casey, as though the acquisition had been in effect for
the period under review, on earnings for the year ended 29 February 2004 and on
the net asset value as at 29 February 2004, is set out below.
Published Pro forma
29 Feb 2004 29 Feb 2004
Before After %
Loss/Earnings per share (cents) (4.3) (0,4) 91%
Headline loss/earnings per share (1.2) 0,7 161%
(cents)
Net asset value per share (cents) (9.7) 15,0 255%
Tangible net asset value per share (9.7) 1,7 118%
(cents)
Weighted average number of shares in 74 980 228 980 205%
issue (`000)
Shares in issue at year end (`000) 74 980 228 980 205%
The financial effect of the transactions has been combined as the transactions
are integral to one another. Pro forma interest received on the difference
between the cash to be raised and the purchase price has been calculated at 6%
before taxation and taxation has been assumed at 30%. Goodwill of approximately
R30,5 million will arise on the acquisition.
Subject to JSE approval, the company will be transferring its listing to AltX
and at the same time the company intends changing its name to DataPro Group
Limited. These details will also be included in the circular, which will be
forwarded to shareholders within 28 days of this announcement. A further
announcement incorporating salient dates will be made in due course.
Withdrawal of cautionary announcement
As a result of this announcement shareholders are advised that the cautionary
announcement is now withdrawn.
Johannesburg
13 August 2004
Sponsor
Arcay Group Limited
Date: 16/08/2004 01:22:09 PM Produced by the JSE SENS Department
