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Micromega HOLDINGS LIMITED - ACQUISITION OF G2 PROPERTIES (PROPRIETARY) LIMITED
AND ITS RELATED BUSINESSES (`G2`) (TRADING AS UNITECH COMPUTER SERVICES)
MICROmega HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/003821/06)
(Share code: MMG ISIN: ZAE000034435)
(`Micromega` or `the group`)
ACQUISITION OF G2 PROPERTIES (PROPRIETARY) LIMITED AND ITS RELATED BUSINESSES
(`G2`) (TRADING AS UNITECH COMPUTER SERVICES)
1. INTRODUCTION
Further to the cautionary announcement published on 28 January 2005, MICROmega
shareholders are advised that MICROmega has entered into an agreement to acquire
the entire issued share capital of G2 and its related businesses, with effect
from 1 December 2004, for a total consideration of R8 million as detailed in
paragraph 4 (`the Acquisition`) below.
2. NATURE OF BUSINESS OF G2
The core business of G2 is the provision of financial management solutions to
the public sector. In addition G2 provides human resource and management
information systems together with hardware to approximately 100 muncipalities in
South Africa, Namibia and Zimbabwe.
3. RATIONALE FOR THE ACQUISITION
The acquisition of Unitech compliments the current technology and revenue
management services provided by MICROmega, and ensures that MICROmega can
continue to expand on the menu of services currently provided to a broad base of
Local Authorities, National and Provincial Government Departments.
4. TERMS OF THE ACQUISITION
4.1 Acquisition, consideration and settlement terms
The acquisition consideration of R8 million was settled as follows:
- R4 million in cash was paid to the Vendors, being Messrs JM Bischoff, JL
Homann, GH Nel and AD Pretorius, on the 14 January 2005, upon delivery to
Micromega of the share certificates in G2.
- 2 million ordinary shares of 1 cents each in Micromega will be issued at an
issue price of R2.00 to the Vendors once the approval by the JSE Securities
Exchange South Africa (`JSE`) for such issue has been obtained.
4.2 Other significant terms
In the event that the MICROmega share price is below R2.00 per share on 1
December 2005, the Vendors can call upon MICROmega to convert the portion of
unsold shares to cash, based on the following formula:
The number of shares unsold multiplied by R2.00.
5. CONDITIONS PRECEDENT
The implementation of the Acquisition is subject to approval by the JSE .
6. FINANCIAL EFFECTS OF THE ACQUISITION
The table below shows the per share effect of the acquisition of G2 for the 6
months ended 30 June 2004. The pro forma financial effects have been prepared
for illustrative purposes only and, because of their nature, may not fairly
present MICROmega`s financial position as at 30 June 2004, or the effect of
future earnings. The financial effects are determined in accordance with the
Listing Requirements of the JSE.
Note Before After Chang
Unaudited Unaudited e (%)
At At
30 June 30 June
2004 2004
Earnings per share (cents) 1 & 2 3.53 5.24 48.44
Headline earnings per share (cents) 3 5.39 7.07 31.17
Net asset value per share (cents) 4 76.36 80.78 5.79
Net tangible asset value per share 4 67.74 64.79 -4.35
(cents)
Weighted average number of shares 86 215 87 215 1.16
(`000)
Total number of shares in issue 88 393 90 383 2.26
(`000)
Notes:
1. The figures in the `Before` column were extracted from the published
unaudited interim results of MICROmega for the six months ended 30 June 2004.
2. The earnings per share calculation in the `After` column is based on the
assumption that the acquisition was effective from 1 January 2004.
3. The headline earnings per share calculation in the `After` column is based on
the same assumption as the earnings per share calculation, except for the
exclusion from headline earnings of impairment of goodwill.
4. Net asset and net tangible asset value per share are based on the following
assumptions:
- The net asset value attributable to the acquisition of G2 was R1.261 million
as at 30 June 2004;
- The net asset value and net tangible asset value of MICROmega reflected on the
balance sheet as at 30 June 2004 was R67.5 million and R60.0 million
respectively; and
- The net asset value and net tangible asset value in the `After` column assumes
that the transaction was effective from 1 January 2004.
7. OTHER MATTERS
The articles of G2 will be amended to comply with the JSE Securities Exchange
Listing Requirements.
8. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
The cautionary announcement dated 28 January 2005 is hereby withdrawn.
Johannesburg
1 March 2005
SPONSOR
LPC Manhattan Sponsors (Pty) Limited
Date: 01/03/2005 05:00:07 PM
Produced by the JSE SENS Department
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