| Wed 15 Feb 2006, 9:03 | | DataPro Group Limited - Acquisition Of Netralink A |
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DTP
DTP
Datapro Group Limited - Acquisition Of Netralink And Withdrawal Of Cautionary
DATAPRO GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/016433/06)
Share code: DTP & ISIN: ZAE000058061
("DataPro Group" or "the company")
ACQUISITION OF THE BUSINESS AND ASSETS OF NETRALINK (PROPRIETARY LIMITED
("Netralink" or "the vendor") AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Following the signing of an agreement dated 14 February 2006, the directors are
pleased to announce the acquisition of the business assets of Netralink,
including the client base and related records, moveable assets, intellectual
property rights and goodwill, with effect from 01 January 2006. The
consideration for the acquisition is R10 175 000 ("the purchase consideration"),
to be settled by the issue to Netralink of a maximum 18 500 000 ordinary shares
("the acquisition shares") in DataPro at an issue price of R0.55 per share. The
purchase consideration is subject to an aggregate warranted turnover of R1 600
000, excluding VAT, ("the warranted turnover") being achieved during January and
February 2006 ("the warranty period") and in the event that such turnover is not
achieved, the purchase consideration will be reduced on a pro rata basis
accordingly. The acquisition remains subject to the conditions precedent as set
out in paragraph 4 below.
2. Rationale for acquisition
Netralink is a leading Internet Business Solutions Provider that supplies
personalised electronic communication solutions to meet business processing
requirements. The acquisition is strategically important for DataPro as it
provides the company with a solid business incorporating a good customer base,
is complementary to DataPro"s existing customer base and provides DataPro with
an important asset in a rapidly consolidating market.
3. Payment of purchase consideration and potential adjustment to the acquisition
price
In the event that the Netralink business fails to achieve the warranted
turnover, the purchase consideration shall be reduced in the proportion that the
actual turnover of the business during the warranty period bears to the
warranted turnover and the number of shares to be issued to the purchaser will
be reduced accordingly. The issued shares will then be held in trust by
DataPro"s auditors until 02 January 2008 until the expiry of the call option
detailed below.
In the event that the trade weighted price at which the DataPro shares are
trading on the JSE on 02 January 2008 is less than R0.55, DataPro shall pay the
vendor an additional sum of money, calculated on the difference between 55 cents
and the volume weighted average price of DataPro on the JSE on 02 January 2008,
based on the remaining number of shares received by the vendor and which have
not been called by DataPro in terms of the call option noted below,.
4. Call option
In terms of the agreement, the vendor has granted DataPro an American call
option, exercisable on or before 01 January 2008. The call option, the exercise
of which remains subject to shareholder approval, provides DataPro with the
opportunity to repurchase the acquisition shares by way of one or more exercises
of such option, at a price of R0.55 per share.
5. Financial effects
The table below sets out the pro-forma financial effects of the acquisition and
the issue of shares on the audited published financial results of DataPro for
the year ended 31 August 2005. The financial information, which is the
responsibility of the directors, has been prepared for illustrative purposes
only and does not necessarily fairly present the company"s financial position
and operational results.
Audited Pro Forma %
31 August after Change
2005 acquisition
"Before"(1) "After"
Earnings per share (cents) 2.10 2.07(2) (1. 4)%
Headline earnings per share 2.53 2.47(2) (2.4)%
(cents)
Net asset value per share 29.78 31.18(3) 4.7%
(cents)
Net tangible asset value per (0.21) 0.01(3) 103.0%
share (cents)
Weighted average number of 228 980 000 247 480 8.1%
shares in issue 000(4)
Shares in issue at period end 314 368 621 332 868 5.9%
621(4)
Notes:
1. The `before" financial information is based on the published audited results
for the 12 months ended 31 August 2005.
2. Earnings and headline earnings have been adjusted for the profit after
taxation of Netralink as extracted from the unaudited financial statements for
the 8 months ended 28 February 2005, on an annualised basis.
3. Net asset value and net tangible asset per share calculations are based on
the purchase price of the business assets in terms of the acquisition agreement,
of which approximately R7.5 million relates to goodwill and other intangible
assets.
4. Weighted average shares and shares in issue at year end have been increased
by the issue of 18 500 000 new shares.
6. Conditions precedent
The acquisition remains subject to the normal conditions precedent that would be
applicable to a transaction of this nature, which conditions include, inter
alia, the approval of the JSE and any other regulatory bodies to the extent
required and the approval of a resolution relating, inter alia, to the approval
of the call option by the shareholders of DataPro at a general meeting convened
for the purpose.
7. Circular to shareholders
A circular, which is subject to the approval of the JSE, containing full details
of the acquisition and call options and a notice of general meeting of
shareholders is in the process of being prepared and will be posted to DataPro
shareholders in due course.
8. Withdrawal of cautionary
Following the publication of this announcement, the cautionary announcement has
been withdrawn and shareholders need no longer exercise caution when dealing in
the company"s securities on the JSE.
In accordance with AltX Listings Requirements, shareholders are advised of the
risks of investing in a company listed on AltX and that the JSE does not
guarantee the viability or the success of a company listed on AltX. In terms of
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 a Designated Advisor it must make arrangement 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 minorities.
Johannesburg
14 February 2006
Company Secretary Designated Advisor
Arcay Client Support (Proprietary) Limited Arcay Corporate Services
Registration number 1998/025284/07
Date: 15/02/2006 09:03:14 AM Produced by the JSE SENS Department
