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PSG PGFP
PSG PGFP
PSG Group/ PSL - PSG Konsult Acquires Multinet Makelaars
PSG GROUP LIMITED
Incorporated in the Republic of South Africa)
Registration number 1970/008484/06)
JSE share code: PSG ISIN: ZAE000013017
("PSG Group")
PSG FINANCIAL SERVICES LIMITED
Registration number 1919/000478/06
JSE share code: PGFP ISIN code: ZAE000060166
("PSL")
PSG KONSULT ACQUIRES MULTINET MAKELAARS
1. INTRODUCTION
1.1 PSG Group, through its wholly-owned subsidiary PSL, holds 80% of the
ordinary issued share capital of PSG Konsult Limited ("PSG Konsult").
1.2 Shareholders of PSG Group are advised that PSG Konsult has reached an
agreement on 31 January 2006 in terms of which PSG Konsult will acquire Multinet
Makelaars (Pty) Limited and an associated company ("Multinet") from the
shareholders of Multinet, which mainly comprise management and Swanvest (Pty)
Limited ("the sellers").
1.3 The acquisition by PSG Konsult referred to in 1.2 above ("the transaction"),
constitutes a category 3 transaction in terms of the JSE Listings Requirements.
This announcement is for information purposes only and no action is required by
PSG Group shareholders with regards to the transaction.
2. DETAILS OF MULTINET
Multinet is active in the short-term insurance industry. Its headline earnings
for the six month period ending 31 August 2005 was R12,5 million. At that date,
the net asset value of Multinet was R53,7 million.
3. RATIONALE FOR THE ACQUISITION
Through this acquisition, PSG Konsult is increasing its market share and
expanding its client base to which its other services could be marketed.
Furthermore, it is one of PSG Konsult"s objectives to increase its recurring
revenue and this transaction will contribute thereto.
4. PARTICULARS OF THE ACQUISITION
4.1 Subject matter of the acquisition
All of the issued ordinary shares in Multinet as well as any loan claims that
the sellers may have against Multinet.
4.2 Acquisition consideration
The total purchase consideration of R180 million will be funded from available
cash resources and is payable in three instalments. A first amount of R98 910
000 is payable on the first business day following the date of fulfilment of the
last suspensive condition. The remaining balance will be paid in two instalments
as soon as possible after finalisation of Multinet"s respective results for the
year ending 28 February 2007 and the six month period ending 31 August 2007.
These payments are subject to a profit warranty and will be reduced if certain
profit targets are not met by Multinet.
4.3 Effective date
The effective date of the transaction is 1 March 2006.
4.4 Suspensive Conditions
The transaction is subject to and conditional upon the following unfulfilled
condition: Obtaining of such regulatory approval as may be required by
regulatory authorities, including the Competition Commission, by 30 April 2006.
4.5 Articles of association
Multinet"s articles of association will be amended to conform with Schedule 10
of the JSE Listings Requirements once the transaction becomes unconditional.
4.6. Warranties
Normal warranties for a transaction of this nature were provided by the sellers.
5. FINANCIAL EFFECTS
The pro forma financial effects of the transaction are presented for
illustrative purposes only and because of their nature may not give a fair
reflection of PSG Group"s financial position nor of the effect on future
earnings after the transaction.
Set out below are the unaudited pro forma financial effects of the transaction,
based on the unaudited consolidated financial results of PSG Group for the six
months ended 31 August 2005. The directors are responsible for these pro forma
financial effects.
Audited Pro forma Change
Before After the (%)
the Transacti
transacti on
on (cents)
(cents)
Earnings per share 84,1 88,8 5,6
Headline earnings per share 101,1 105,7 4,5
Net asset value per share 412 412 Nil
Net tangible asset value per 328 192 (41,5)
share
1. The earnings and headline earnings per share figures in the "Pro forma After
the transaction" column have been calculated:
- on the basis that the transaction was effected on 1 March 2005; and
- the consideration paid would have earned interest at an after tax interest
rate of 6%.
2. The net asset value and net tangible asset value per share figures in the
"Pro forma After the transaction" column have been calculated on the basis that
the transaction was effected on 31 August 2005.
Stellenbosch
31 January 2006
PSG Capital
Sponsor to PSG Group
Date: 01/02/2006 07:00:09 AM Produced by the JSE SENS Department
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