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Xantium - Update On The Acquisition Of The Business Of Simeka
Management Consulting And Sifikile Procurement Services, Change Of
Name And Cautionary Announcement
Xantium Technology Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration No. 2003/012583/06)
Share code: XAN
ISIN code: ZAE000057386
("Xantium" or "the company")
XANTIUM: UPDATE ON THE ACQUISITION OF THE BUSINESS OF SIMEKA
MANAGEMENT CONSULTING AND SIFIKILE PROCUREMENT SERVICES, CHANGE OF
NAME AND CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the announcement on 28 April 2005
regarding the acquisition of the business of Simeka Management
Consulting ("Simeka Consulting") and Sifikile Procurement
Services ("Sifikile").
2. SIMEKA CONSULTING
Java Capital (Proprietary) Limited is authorised to announce the
satisfactory conclusion of the due diligence investigation by
Xantium and the conclusion of the acquisition of the business of
Simeka Consulting subject to the following conditions precedent:
- approval of the competition authorities;
- the conclusion of employment and restraint of trade agreements
by key executives of Simeka Consulting; and
- consent of all counterparties to the transfer of all key
business contracts to Xantium or implementation of alternative
arrangements to the satisfaction of Xantium.
The date on which the conditions are fulfilled is the
"implementation date".
2.1. BASIS OF THE SIMEKA CONSULTING ACQUISITION
The maximum purchase consideration is R33.9 million of
which R8.6 million will be payable in cash and the balance
of R25.3 million by the delivery of 42 110 928 Xantium
shares ("consideration shares") at 60 cents per share,
payable after all conditions have been fulfilled.
Consideration shares are subject to trading restrictions
and pre-emptive rights in favour of Xantium.
2.2. CHANGE OF NAME
Xantium intends changing its name to Simeka Technology
Holdings Limited. A circular will be sent to shareholders
including notice of a general meeting giving effect to the
name change in due course.
2.3. BOARD OF DIRECTORS
On the implementation date, Robinson Ramaite and Barry
Fraser will be appointed as non-executive directors and
Kamal Ramsingh will be appointment as an executive director
of Xantium.
2.4. PRO FORMA FINANCIAL EFFECTS
The pro forma financial effects of the acquisition of
Simeka Consulting set out in the table below are the
responsibility of the company"s directors and have been
prepared for illustrative purposes only to show how the
acquisition of Simeka Consulting may have affected the
group"s published results for the year ended 31 May 2005
("the year end results"). Because of their nature the pro
forma financial effects will not clearly reflect Xantium"s
financial position after the acquisition of Simeka
Consulting nor of its future earnings.
Year end Pro forma Percentage
results year end change
before the results (%)
acquisition after the
of Simeka acquisition
Consulting of Simeka
(cents)(1) Consulting
(cents)(2)
Headline earnings per 7.1 5.7 (19.8)
share
Earnings per share 7.2 5.8 (19.8)
Net asset value per 36.3 42.0 15.5
share
Net tangible asset value (16.2) (17.2) (6.5)
per share
Number of shares in 150 664 192 775
issue and to be issued
Notes:
(1) The "Year end results before the acquisition of Simeka
Consulting" column reflects Xantium"s earnings per share, headline
earnings per share, net asset value per share and net tangible
asset value per share as published in the year end results.
(2) The "Pro forma year end results after the acquisition of
Simeka Consulting" column reflects the effects of the acquisition
on the earnings per share and headline earnings per share based on
the following assumptions:
- the acquisition of Simeka Consulting was effective 1 June
2004;
- interest would have been incurred at a rate of 10.5% on the
cash consideration payable;
- taxation at the rate of 29%;
- the inclusion of Simeka Consulting"s profit after tax for a 12
month period based on Simeka Consulting"s audited results for the
18 month period ended 31 December 2004 on the assumption that the
earnings were earned evenly over the 18 month period.
The "Pro forma year end results after the acquisition of
Simeka Consulting" net asset value per share and net tangible
asset value per share are based on the following assumptions:
- the acquisition of Simeka Consulting was effective 31 May
2005;
- the raising of additional shareholder equity for amounts due
to vendors of R25.3 million;
- for purposes of net tangible asset value per share, the
raising of additional goodwill of R33.9 million; and
- 177.1 million shares in issue.
3. UPDATE ON THE ACQUISITON OF SIFIKILE AND FURTHER CAUTIONARY
ANNOUNCEMENT
Shareholders are notified that the due diligence investigation of
Sifikele is on-going. Shareholders are also advised that Xantium
has entered into negotiations regarding other acquisition/s. If
successfully concluded, these may also have a material effect on
the price of the company"s shares. Accordingly, shareholders are
advised to continue to exercise caution when dealing in the
company"s shares, pending further announcements.
Rosebank
29 September 2005
Warning: The listing of the ordinary shares in the company is on
the ALTX. Shareholders are advised of the risks of investing in a
company listed on the ALTX. Shareholders are advised that the JSE
does not guarantee the viability or the success of a company listed
on the ALTX. In terms of the JSE Listings Requirements a designated
advisor has to be retained by the company. The designated advisor
is required to, inter alia, attend all board meetings held by the
company to ensure that all JSE Listings Requirements and applicable
regulations are complied with, approve the financial director of
the company and guide the company in a competent, professional and
impartial manner. If the company fails to retain the designated
advisor it must make arrangements to appoint a new designated
advisor within 10 business days, failing which the company faces
suspension of trading of its securities. If a designated advisor is
not appointed within 30 days of its suspension the company faces
the termination of its listing without an offer to minority
shareholders.
Designated and legal advisor:
Java Capital (Proprietary) Limited
Date: 30/09/2005 07:00:17 AM Produced by the JSE SENS Department
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