| Thu 28 Apr 2005, 11:31 | | Xantium Technology Holdings Limited - Acquisition |
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Xantium Technology Holdings Limited - Acquisition Of The Businesses Of Sifikile
Procurement Services And Simeka Consulting And Further 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`)
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.
ACQUISITION OF THE BUSINESSES OF SIFIKILE PROCUREMENT SERVICES AND SIMEKA
CONSULTING AND FURTHER CAUTIONARY ANNOUNCEMENT
INTRODUCTION
Xantium listed on Altx in August 2004 and its first full financial year will end
on 31 May 2005.
Xantium provides its customers with products and services constituting complete
IT solutions. These range through strategy and design, consulting and
implementation, supply of hardware and software, on-going IT support and
professional management consulting.
With strong BEE credentials, Xantium benefits from the imperative of affirmative
procurement in the private and public sectors.
Since listing, as previously announced, Xantium has expanded and enhanced its
business with the following acquisitions:
- in September 2004 Xantium acquired the business of Spec Systems, a leading
provider of barcode, label and PVC card solutions to the government and private
sectors;
- in March 2005, subject to conditions some of which are still to be fulfilled,
Xantium acquired 51% of Waymark Consulting (Pty) Limited, which specialises in
Oracle applications for government. This business is to be renamed Xantium Data
Solutions;
- in April 2005, subject to conditions some of which are still to be fulfilled,
Xantium acquired the business of Foster Melliar (Pty) Limited, a specialist in
IT training and an industry leader regarding Information Technology
Infrastructure Library or ITIL.
LATEST ACQUISITIONS
Java Capital is now authorised to announce that Xantium has acquired the
businesses of Sifikile Procurement Services (Proprietary) Limited (`Sifikile`)
and Simeka Consulting (Proprietary) Limited (`Simeka Consulting`), subject to
conditions referred to below. These acquisitions are significant and prestigious
not only for the value they contribute, but also because they will materially
enhance Xantium`s BEE transformation and credentials and bring additional
leading black entrepreneurs onto Xantium`s board and into its management.
Simeka Consulting is an award winning management consultancy, rated as one of
the top empowerment companies in South Africa and a recipient of the Golden
Arrow Award for the best strategy consultant to government. Simeka Consulting
has a national client base including government and key telecommunications and
energy customers.
Sifikile partners Siemens Business Services in delivering on IT systems
management contracts for private and public sector customers including the
Department of Labour. These contracts are typically long-term and entail the
delivery of managed IT procurement, systems administration and end-user support
through the provision of on-site system engineers.
These acquisitions will broaden Xantium`s customer base in government and the
private sector and bring significant annuity revenue streams through long-term
service and procurement contracts. In addition, Sifikile and Simeka Consulting
contribute a wealth of skilled and experienced personnel who will deepen
Xantium`s professional consulting capacity and build additional delivery
capability to optimise on Xantium`s strong sales capability.
CONSIDERATION FOR THE ACQUISITIONS
The consideration for the acquisition of Sifikile is R64.5 million, of which
R14.06 million will be payable in cash, R15 million by the assumption of
specified liabilities and the balance by delivery of 59 062 500 Xantium shares
(`shares`) at 60 cents per share.
The consideration for the acquisition of Simeka Consulting is R43.8 million, of
which R10.94 million will be payable in cash, R5.34 million by the assumption of
specified liabilities and the balance by delivery of 45 937 500 shares at 60
cents per share.
Shares to be delivered in terms of the acquisitions are referred to below as
`consideration shares`.
SHAREHOLDING IN XANTIUM AFTER THE ACQUISITIONS
After the issue of the consideration shares, Sifikile Procurement Services
(Proprietary) Limited will hold approximately 24% and Simeka Consulting
(Proprietary) Limited approximately 19% of the issued shares of Xantium.
The consideration shares will be subject to trading restrictions and pre-emptive
rights in favour of Xantium.
CONDITIONS TO THE ACQUISITIONS
The acquisitions are subject to conditions precedent including:
- satisfactory due diligence investigations by Xantium;
- the requisite regulatory approvals including, if required, approval of the
JSE, the SRP and the competition authorities;
- approval by shareholders of Xantium and, if applicable, a waiver of any
mandatory offer which would otherwise be required to be made as a result of the
issue of the consideration shares;
- the conclusion of employment, restraint of trade and/or handover agreements by
key executives of Sifikile and Simeka Consulting;
- consent of all counterparties to the transfer of all key business contracts to
Xantium or implementation of alternative arrangements to the satisfaction of
Xantium;
- Xantium board approval;
- conclusion of a voting and shareholders agreement between Sifikile, Simeka
Consulting, the shareholders of Sifikile and Simeka Consulting and other key
shareholders in Xantium, if so required by any of them.
BOARD OF DIRECTORS
On completion of the acquisitions, Robinson Ramaite, Barry Fraser and Dumisani
Khoza will be appointed as non-executive directors and Kamal Ramsingh will be
appointed as an executive director of the company.
FURTHER CAUTIONARY ANNOUNCEMENT
Further details of the acquisition including financial effects will be announced
in due course. Shareholders are also advised that Xantium is in 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
28 April 2005
Designated advisor, corporate advisor and legal advisor
Java Capital (Proprietary) Limited
