| Wed 3 May 2006, 9:05 | | Synergy Holdings - Proposed reconstitution of Syne |
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Synergy Holdings - Proposed reconstitution of Synergy
Synergy Holdings
(Incorporated in the Republic of South Africa)
(Registration number 1995/006315/06)
Share code: SNG ISIN: ZAE000017760
("Synergy" or "the company")
PROPOSED RECONSTITUTION OF SYNERGY AS A BLACK EMPOWERED SOFTWARE
HOLDING
COMPANY;
ACQUISITION OF SDT FINANCIAL SOFTWARE SOLUTIONS
(PTY) LTD ("SDT");
ISSUE OF SHARES FOR CASH;
CHANGE OF NAME TO SILVERBRIDGE HOLDINGS LIMITED; AND
FURTHER CAUTIONARY ANNOUNCEMENT
1. Introduction
Further to the cautionary announcements dated 7 February and 30
March 2006, Sasfin Capital is authorised to announce that Synergy
has entered into an agreement with the shareholders of SDT ("the
vendors") for the acquisition of the entire issued share capital
of SDT ("SDT equity") in consideration for which shares in Synergy
will be issued ("the consideration shares"), subject to certain
conditions precedent ("the acquisition"). The vendors are in
advanced negotiations to onsell a proportion of the consideration
shares to a black empowerment partner ("the BEE transaction").
Implementation of the acquisition and the BEE transaction will
result in Synergy being realigned as a black empowered software
holding company and renamed SilverBridge Holdings Limited.
Furthermore, to facilitate the aforegoing, its authorised share
capital will be increased, its share capital will be consolidated
on a 1 for 10 basis ("the consolidation"), its board of directors
will be reconstituted and an application will be made to the JSE
Limited ("JSE") to transfer the listing of the company to the
Alternative Exchange ("AltX").
2. Terms of the acquisition and issue of shares for cash
The acquisition consideration of R50 000 000 will be settled
through the issue of 25 000 000 new ordinary shares in the company
at an issue price of 200 cents per share ("cps") after the
consolidation. The acquisition agreement contains the standard
warranties for a transaction of this nature and is subject to
fulfilment of the conditions precedent detailed in paragraph 7.
The vendors of the SDT equity comprise the trustees of the
undermentioned trusts:
* Jaco Swanepoel Trust ("Swanepoel Trust"), in respect of 39.5%;
* Freda du Toit Family Trust ("du Toit Trust"), in respect of
39.5%;
* The i capital Growth Fund 1 Trust ("the Trust"), in respect of
20%; and
* The SDT Share Trust, in respect of 1%.
The company intends to raise approximately R4 000 000 by means of
an issue of shares for cash to selected investors at a price of
200cps immediately following the conclusion of the acquisition
("the issue of shares for cash").
3. Reconstitution of Synergy
The directors propose to reconstitute the company as a black
empowered specialist software holding company. In this regard, the
following steps will be taken:
* The authorised and issued share capital of the company will be
consolidated
on the basis of 1 ordinary share of 10 cents for every 10 existing
ordinary shares of 1 cent each and increased to 200 000 000
authorised ordinary shares of 10 cents each, of which 5 247 285
will be in issue prior to the acquisition and 32 247 285 will be
in issue post the acquisition and issue of shares for cash;
* the vendors are in advanced negotiations to onsell 7 561 821 of
the
consideration shares in the company to a black empowerment partner
resulting in 25% of the company being black owned;
* the company"s name will be changed to SilverBridge Holdings
Limited;
* the board will be reconstituted; and
* the company"s Memorandum and Articles of Association will be
amended to reflect the necessary changes.
4. Rationale
Synergy listed on the Development Capital Market of the JSE in
April 1999 with its main business focus being the accounting
software market. In December 2005, the company disposed of its
sole operating subsidiary and related properties to become a cash
shell with its only asset being approximately R4 000 000 in cash.
As part of the restructuring of Synergy and the disposal of its
operating assets, a consortium comprising the Trust, i capital
(Pty) Ltd, the Rowan Nigel Williams Family Trust, the Swanepoel
Trust and the du Toit Trust ("the i capital consortium") acquired
an 83.0% interest in Synergy from the company"s founding
shareholders with a view to establishing a specialised black
empowered software investment holding company.
The participants in the i capital consortium and the vendors are
related parties and as a consequence the acquisition is
categorised as a related party transaction in terms of the
Listings Requirements of the JSE.
5. New nature of business of the company
The company"s corporate strategy following the acquisition will be
to build a black empowered group of niche business application
software and related service businesses operating on a
decentralised basis, through an acquisitive growth strategy. Each
operating subsidiary will function independently and retain its
unique business unit strategy.
SDT operates in the software and services sector of the
Information Technology industry and is currently focused on the
provision of proprietary financial services administration
software solutions and related services to the long term insurance
industry. SDT has been in operation in excess of 10 years, during
which time it has secured a diversified client base within the
long-term insurance industry, with over 50% of its installed sites
outside South Africa. Despite the adverse information technology
cycle in recent years, SDT has increased its revenues at a
compound annual growth rate of almost 20% over the past five
years. The evolution and demand for financial services in Africa
and the drive toward lower cost solutions in the long term
insurance industry in South Africa, together with the improving
information technology cycle, provides a platform for the
continued growth of SDT.
The company has identified other businesses similar to SDT which
have a niche market position, and which would benefit from BEE
credentials, access to capital and the transparency and
credibility of being part of a listed company.
6. Transfer of listing to AltX
Application will be made to the JSE for the transfer of the
listing of the company"s share capital to AltX subject to the
approval of shareholders of the acquisition.
7. Conditions precedent
The acquisition is subject to the fulfilment of normal conditions
precedent applicable to a transaction of this nature, which
conditions are indivisible and include the following:
* Synergy board approval of the acquisition;
* approval of the ordinary and special resolutions necessary to
implement the
transactions and change of name by the requisite majority of
Synergy"s
shareholders; and
* approval by the requisite regulatory authorities, including the
JSE and the
Securities Regulation Panel, to the extent required.
8. Categorisation of acquisition
The acquisition is categorised as a related party transaction and
a reverse take-over in terms of the Listings Requirements of the
JSE. A circular to shareholders, incorporating revised listing
particulars and a fair and reasonable opinion on the acquisition
terms from an independent professional expert acceptable to the
JSE, will be prepared and posted in due course. Shareholders
should note that the final listing of the company is at the
discretion of the JSE and is contingent upon the JSE"s assessment
of the suitability for listing of the company after the
acquisition.
9. Further cautionary announcement
A further announcement will be made giving the financial effects
of the transactions and giving salient dates for the consolidation
and the change of name. Until such announcement is made,
shareholders are advised to continue to exercise caution in
trading in their Synergy shares.
Johannesburg
2 May 2006
Sponsor
Sasfin Capital
(a division of Sasfin Bank Limited)
Corporate adviser
iCAPITAL fund managers
Corporate legal consultants and advisers
EDWARD NATHAN
Corporate Law Advisers
EDWARD NATHAN (Proprietary) Limited
Registration No. 2004/005665/07
Date: 03/05/2006 09:05:53 AM Produced by the JSE SENS Department
