| Thu 24 Mar 2005, 9:45 | | Purple Capital Limited - Proposed Acquisitions, Ca |
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Purple Capital Limited - Proposed Acquisitions, Capital Raising And Launch Of
Bee Fund
Purple Capital Limited
(formerly AVASA Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1998/013637/06)
Share code: PPE ISIN: ZAE000063897
(`Purple Capital` or `the company`)
PROPOSED ACQUISITIONS, CAPITAL RAISING AND LAUNCH OF BEE FUND
1. Introduction
Purple Capital is pleased to announce that:
* it has concluded Memoranda of Understanding (`MOU`) in terms of which it
will acquire strategic shareholdings in Bridge Capital Group Limited (`BCG`)
and acsis Limited (`acsis`) (collectively, `the acquisitions`);
* it is the intention of the directors to raise up to a maximum of R15
million in cash by way of a new issue of shares at a price to be determined
(`general issue of shares for cash`); and
* significant progress has been made in raising a $250 million Black Economic
Empowerment (`BEE`) fund, which Purple Capital will manage.
These developments are in line with Purple Capital`s forward strategy as set
out in its circular to shareholders dated 3 January 2005 where the intention
was stated `...to align like minded financial experts in a structure that can
offer the benefits of association, improve access to efficient capital and not
stifle independence.`
2. The acquisitions
2.1 The BCG acquisition
Purple Capital has entered into an MOU with the vendors of BCG in terms of
which it will acquire, subject to the conditions precedent set out in paragraph
4 below, 30% of the issued share capital of BCG with effect from 1 April 2005,
for a purchase consideration of R5.2 million to be settled by the issue of 51
980 447 new ordinary shares in Purple Capital at 10 cents per share (`the BCG
acquisition`).
BCG is an independent corporate finance house involved in mergers and
acquisitions, capital raisings, financial structuring and transaction support
services, as well as project finance and property advisory services. BCG is a
Sponsor to numerous companies listed on the JSE Securities Exchange South
Africa (`the JSE`) and is an approved Designated Advisor with respect to the
Alternative Exchange (`ALTx`).
The BCG acquisition secures for Purple Capital one of the leading
independent corporate finance advisory capabilities.
2.2 The acsis acquisition
Purple Capital has also entered into an MOU with the vendors of acsis in
terms of which it will acquire, subject to the conditions precedent set out in
paragraph 4 below, 20% of the issued share capital of acsis with effect from 1
April 2005, for a purchase consideration of R12 million to be settled by the
issue of 120 000 000 new ordinary shares in Purple Capital at 10 cents per
share (`the acsis acquisition`).
acsis is an independent asset consulting and financial planning company.
acsis develops and implements investment strategies for individuals,
corporations, institutions, retirement funds and professional firms. acsis`s
approach is founded on the principles of lifestyle planning, pioneered by ipac
Securities (Australia), from which acsis has an exclusive license in perpetuity
in South Africa.
The acsis acquisition brings the leading personal financial planning
capability in the country into Purple Capital.
3. Related party transactions
Mark Barnes, Chairman of Purple Capital, has a 30.7% interest in BCG and a
15.0% interest in acsis. As a result thereof, in terms of the Listings
Requirements of the JSE, both the BCG acquisition and the acsis acquisition are
classified as related party transactions and therefore require opinions from an
independent professional expert and the approval of the Purple Capital
shareholders, excluding the related party, in general meeting. The independent
directors of Purple Capital will appoint the independent professional experts
shortly. In aggregate, if both the acquisitions are implemented, and prior to
the general issue of shares for cash, Mark Barnes will have an effective 31%
interest in Purple Capital.
4. Conditions precedent
The acquisitions are conditional on, inter alia, the fulfilment of the
following conditions precedent:
* the passing of the requisite resolutions by Purple Capital shareholders in
general meeting to approve the acquisitions;
* the completion of an independent fair and reasonable opinion on each of the
BCG and the acsis acquisitions;
* the finalisation of comprehensive transaction and shareholder agreements in
respect of each of the BCG and the acsis acquisitions; and
* any regulatory approval(s) which may be required.
5. PRO FORMA FInancial effects of the acquisitions
Set out in the table below are the pro forma financial effects of the
acquisitions based on Purple Capital`s published interim results for the six
months ended 28 February 2005. The pro forma financial effects have been
prepared for illustrative purposes only to provide information of how the
acquisitions may have impacted on the results and financial position of Purple
Capital. Because of their nature, the pro forma financial effects may not give
a fair reflection of Purple Capital`s financial position after the
acquisitions or the effect on future earnings.
Note Before the After the Percentage
acquisitions1 acquisitions change
(cents) (cents) (%)
Earnings per share (cents) 2 0.02 0.24 1 446
Headline earnings per share (cents) 2 0.02 0.24 1 446
Net asset value per share (cents) 3 1.38 2.53 83
Net tangible asset value per
share (cents) 3 1.38 2.53 83
Notes:
1. Extracted from the published reviewed interim results of Purple Capital
for the six months ended 28 February 2005.
2. Earnings and headline earnings per share in the `After the acquisitions`
column have been based on the following assumptions:
(a) the acquisitions were effective from 1 September 2004;
(b) the weighted number of shares in issue before and after the acquisitions
were 615 818 493 and 787 798 970, respectively.
3. Net asset value and net tangible asset value per share in the `After the
acquisitions` column have been based on the following assumptions:
(a) the acquisitions were effective 28 February 2005;
(b) the number of shares in issue at 28 February 2005 were 1 114 083 333
before the acquisitions and 1 286 063 780 after the acquisitions.
6. general issue of shares for cash
In terms of the general authority granted to the directors of the company at
the Annual General Meeting held on 1 February 2005, and subject to the Listings
Requirements of the JSE, it is the intention of the directors to raise up to a
maximum of R15 million in cash by way of an issue of new shares at a price to
be determined. Details of the general issue of shares for cash will be
announced shortly.
The purpose of this general issue of shares for cash is to strengthen the
capital reserves of Purple Capital and provide such cash funding as may be
required for further acquisitions.
7. Blackstar Equity Fund 1
Purple Capital believes that equity is a key component in the long-term
sustainability of BEE funding structures.
Purple Capital is well progressed in raising a $250 million fund that will
be named Blackstar Equity Fund 1 (`Blackstar`). The purpose of Blackstar will
be to provide real equity capital as part of the overall funding mix for
selected BEE transactions. Blackstar aims to be a funding partner to BEE
groups in the acquisition of listed, public sector and private companies in
South Africa.
As a first stage in raising the fund, a number of presentations have been
made to representatives of significant pools of capital in the United Kingdom
and Europe, where first indications of interest have been positive. In due
course, investors in the local market will also be approached and shareholders
will be kept informed of major developments in this regard.
8. Application for transfer of listing
Upon successful implementation of the abovementioned transactions, the
directors intend making an application to the JSE to transfer the company`s
listing from the Venture Capital Market to the Main Board.
9. Documentation
A circular containing full details of the acquisitions, the general issue of
shares for cash and including, inter alia, the opinions from the independent
professional experts and a notice of general meeting of shareholders will be
posted in due course.
Johannesburg
24 March 2005
Transaction Sponsor
Bridge Capital
Sponsor
Java Capital
Reporting accountants
and auditors
KPMG
