| Thu 13 Apr 2006, 12:42 | | MICROmega - Acquisition Of BTM Manufacturing (Prop |
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MMG
MMG
MICROmega - Acquisition Of BTM Manufacturing (Proprietary) Limited ("BTM")
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 BTM MANUFACTURING (PROPRIETARY) LIMITED ("BTM")
1. INTRODUCTION
Further to the cautionary announcement published on 9 January 2006 and its
subsequent renewal on 20 February 2006, MICROmega shareholders are advised
that MICROmega has entered into an agreement to acquire the entire issued
share capital of BTM and its related businesses, with effect from 1
November 2005, for a total consideration of R20 million as detailed in
paragraph 4 ("the Acquisition") below.
2. NATURE OF BUSINESS OF BTM
BTM is the largest manufacturer of bullbars and the second largest
manufacturer of towbars in Southern Africa. BTM supplies exclusively to
independent distributors and has an extensive distribution network
throughout Southern Africa.
3. RATIONALE FOR THE ACQUISITION
The acquisition of BTM compliments the group"s expansion in the agency and
manufacturing sectors and increased distribution requirements, in
particular relating to Deltec Power Distributors (Proprietary) Limited.
4. TERMS OF THE ACQUISITION
4.1 Acquisition, consideration and settlement terms
The acquisition consideration of R20 million will be settled as
follows:
4.1.1 First payment
* R2,5 million in cash will be paid to the Vendors of BTM on
the closing date, which date shall be 3 (three) business
days after fulfilment of the conditions precedent referred
to in paragraph 5 below.
* 2,5 million ordinary shares of 1 cents each in MICROmega
will be issued with a market value as at the closing date of
not less than R7,5 million. Should the value of the shares
be less than R7,5 million as at the closing date, then
shares shall be issued to the vendor in accordance with the
following formula:
* 7 500 000 divided by the MICROmega share price at closing
date
4.1.2 Second payment
* On publication of an external audit certificate certifying
that the net profit after tax of BTM for the year ended 31
October 2006 is not less than R6 million, then MICROmega
will pay the sellers a total of R1 250 000 in cash, and
issue the sellers MICROmega shares to the value of R3 750
000 only, based on the average closing price of MICROmega
shares as quoted by the Johannesburg Stock Exchange for 30
days prior to 31 October 2006.
* In the event that the net profit after tax of BTM for the
year ended 31 October 2006 is less than R6 million, the
Vendors will receive a pro rata portion of both cash and
MICROmega shares.
4.1.3 Final payment
* On publication of an external audit certificate certifying
that the net profit after tax of BTM for the year ended 31
October 2007 is not less than R6,3 million, then MICROmega
will pay the sellers a total of R1 250 000 in cash, and
issue the sellers MICROmega shares to the value of R3 750
000 only, based on the average closing price of MICROmega
shares as quoted by the Johannesburg Stock Exchange for 30
days prior to 31 October 2007.
* In the event that the net profit after tax of BTM for the
year ended 31 October 2007 is less than R6,3 million, the
Vendors will receive a pro rata portion of both cash and
MICROmega shares.
5. CONDITIONS PRECEDENT
The implementation of the acquisition is subject to approval by the JSE,
the board of MICROmega and shareholders of MICROmega if necessary.
6. FINANCIAL EFFECTS OF THE ACQUISITION
The table below shows the per share effect of the acquisition of BTM for
the year ended 31 December 2005. The pro forma financial effects, which are
the responsibility of the directors of MICROmega, have been prepared for
illustrative purposes only and, because of their nature, may not fairly
present MICROmega"s financial position as at 31 December 2005, or the
effect of future earnings. The financial effects are determined in
accordance with the Listing Requirements of the JSE.
Notes Unadjusted Adjusted Change (%)
Pro-forma
Audited
At At
31 December 31 December
2005 2005
Earnings per share 4 16.92 22.01 30.08
(cents)
Headline earnings per 5 18.86 23.90 26.72
share (cents)
Net asset value per 6 111.58 121.96 9.30
share (cents)
Net tangible asset 7 60.19 66.48 10.45
value per share
(cents)
Weighted average 8 91 253 064 93 753 064
number of shares
Total number of 8 92 905 027 95 405 027
shares in issue
Notes:
1. The figures in the "Unadjusted" column are extracted from the
published audited results of MICROmega for the year ended 31 December
2005.
2. In the "Adjusted pro-forma" column only the results of BTM for the
period January to October 2005 have been adjusted as BTM"s results for
November and December 2005 were included in the audited "Unadjusted"
figures.
3. If the acquisition was performed at 1st January 2005 it has been
assumed that the purchase price would not have changed and there would
have been additional goodwill of R5 197 148.
4. Earnings per share calculations in the "Adjusted pro-forma" column are
based on the following assumptions:
* The acquisition was effective 1st January 2005.
* The net profit after tax of BTM for the 10 months ended 31
October 2005 was R5 197 148.
* The net profit after tax of BTM for the 2 months ended 31
December 2005 was R808 545.
5. Headline earnings per share calculations in the "Adjusted pro-forma"
column have been based on the following assumptions:
* None of the earnings of BTM are to be excluded for Headline
Earnings calculations.
6. Net asset value per share is calculated on a net asset value of
R103 663 125 for the "Unadjusted" column and R116 360 273 for the
"Adjusted pro-forma" column with the adjustment comprising both an
R7 500 000 increase in share capital and premium and the increase in
retained earnings of R5 197 148.
7. Net intangible asset value per share is calculated on a tangible asset
value of R55 920 775 for the "Unadjusted" column and R63 420 775 for
the "Adjusted pro-forma" column with the adjustment comprising
R7 500 000 increase in share capital and premium.
8. The weighted average number of shares and the actual number of shares
in issue have been adjusted for the assumption that the 2,5 million
Ordinary Shares were issued on the 1st January 2005.
OTHER MATTERS
The articles of BTM will be amended to comply with the JSE"s Listing
Requirements.
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
The cautionary announcement dated 20 February 2006 is hereby withdrawn.
Johannesburg
13 April 2006
SPONSOR
LPC Manhattan Moela (Pty) Limited
Date: 13/04/2006 12:42:14 PM Produced by the JSE SENS Department
