| Fri 18 Aug 2006, 8:26 | | Simeka BSG - Variation to the terms of acquisition |
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SBG
SBG
Simeka BSG - Variation to the terms of acquisitions: Spec Systems and
Waymark Consulting
Simeka BSG Limited
Incorporated in the Republic of South Africa)
(Registration No. 2003/012583/06)
(formerly Xantium Technology Holdings Limited)
Share code: SBG & ISIN code: ZAE000074878
("Simeka BSG" or "the company")
VARIATION TO THE TERMS OF ACQUISITIONS: SPEC SYSTEMS AND WAYMARK CONSULTING
INTRODUCTION
This announcement describes various revisions to the terms of certain of
the acquisitions made and announced by the company. The revisions, which
are not subject to any unfulfilled conditions or to shareholder approval
(other than in the case of Waymark Consulting as indicated, below), have
been agreed in order to accommodate implementation and integration of the
acquisitions in a manner considered by the board to be in the best
interests of the company.
SPEC SYSTEMS
Shareholders are referred to the announcement of 9 September 2004,
regarding the company"s acquisition of the business of Spec Systems
(Proprietary) Limited ("Spec").
The maximum consideration payable to the vendor remains R30 000 000, as
previously announced. However, the payments have been restructured as
follows:
- on implementation of the acquisition an initial amount of R7,5 million
was paid, R5 million in cash and R2,5 million by the delivery of
shares issued at 50 cents per share;
- on 17 March 2006 a further payment was made comprising R4,375 million
in cash and delivery of 8,75 million shares issued at 50 cents per
share;
- With reference to future amounts to be paid:
on 31 March 2007 a further payment is due comprising R4,375 million in
cash and the delivery of 2 million shares issued at 67 cents per
share; and
- all or part of the balance of the purchase price, being a maximum
amount of R8 million, will be payable in cash and by delivery of
shares, dependent on the earnings of the Spec business for the years
ending 31 May 2006, 31 May 2007, 31 May 2008 and 31 May 2009 (whereas
under the original terms there would have been a cash payment of R2,5
million due in August 2007 and the balance of the purchase price would
have been payable in cash and by delivery of shares, dependent on the
earnings of the Spec business for the years ending 31 August 2005,
2006 and 2007).
The revised pro forma financial effects of the Spec acquisition set out in
the table below are the responsibility of the company"s directors and have
been prepared for illustrative purposes only, to show how the terms of the
Spec acquisition varied as described above affected Simeka BSG"s results
for the financial year ended 31 May 2006.
Pre the Post the Percentage
variation variation Change
Net tangible asset value per (3,71) (2,99) 24,16
share ("NTAV") (cents)
Notes:
- The "Pre the variation" column reflects what the NTAV would have been
at 31 May 2006 had the variation to the terms of the Spec acquisition
not taken place;
- The "Post the variation" column is the NTAV as disclosed in Simeka
BSG"s results for the financial year ended 31 May 2006;
- The effect of the variation to the terms of the Spec acquisition on
earnings per share, headline earnings per share and net asset value
per share for the year ended 31 May 2006 is immaterial;
- The calculation in the "After" column is based on 345 946 000 shares
in issue.
Shareholders are advised that the variations to the terms of the Spec
acquisition involved discussions with Mr Colin Roux, the sole shareholder
of Spec, who is, consequent upon the Spec acquisition, currently a director
or Xantium IT Services (Proprietary) Limited, a subsidiary of Simeka BSG.
WAYMARK CONSULTING
Shareholders are referred to prior announcements regarding the company"s
acquisition of the entire issued share capital of Waymark Consulting
(Proprietary) Limited ("Waymark Consulting"), particularly those of 21
November and 3 October 2005.
The company has agreed to vary the pricing and payment terms of its Waymark
Consulting acquisition, but only as such terms pertain to one of the
vendors, Mr E Scholtz, who sold 25% of the issued shares in Waymark
Consulting to the company. Scholtz has resigned as an executive of the
company and director of its subsidiary with effect from 31 March 2006, but
remains bound by the restraint of trade undertakings he provided.
The variations relate to payments that would have fallen due to Scholtz on
and after 31 August 2006 (the "remaining payments"), all payments due prior
to that date having being discharged by the company. In this regard, the
following payments were still owed to Scholtz:
- a cash payment of R1,982,250 (split into 3 instalments, payable at 31
August 2006, 2007 and 2008); and
- the delivery of 1 175 000 Simeka BSG shares issued at 65 cents a
shares at 31 August 2006, the delivery of 750 000 shares issued at 70
cents a share at 31 August 2007 and the delivery of 895 000 shares
issued at 75 cents a share at 31 August 2008.
The revised pricing and payment terms agreed with Scholtz in settlement of
the remaining payments are as follows:
- a cash payment of R500,000 (which has already been settled by the
company);
- a cash payment of R1,8 million, payable on 31 August 2006; and
- an interest free cash payment of R1,2 million, payable in twelve
monthly instalments of R100,000 each, to be made on the last day of
each calendar month from January 2007.
With effect from 1 March 2005 Simeka BSG acquired 51% of the shares in
Waymark Consulting. With effect from 1 September 2005 the company acquired
the remaining 49% of Waymark Consulting. This was a related party
transaction in terms of the Listings Requirements of the JSE, for which the
approval of shareholders was obtained. As such, the above variations are
subject to the approval of a majority of shareholders. A resolution seeking
the necessary approval will be proposed at the annual general meeting of
shareholders, to be held during September 2006. The company has secured
irrevocable undertakings from a majority of its shareholders that they will
support this resolution.
The revised pro forma financial effects of the Waymark Consulting
acquisition set out in the table below are the responsibility of the
company"s directors and have been prepared for illustrative purposes only,
to show how the terms of the Waymark Consulting acquisition, varied as
described above affected Simeka BSG"s results for the financial year ended
31 May 2006.
Pre the Post the Percentage
variation variation Change
Net tangible asset value per (2,70) (2,99) (0,63)
share (cents)
Notes:
- The "Pre the variation" column reflects what the NTAV would have been
at 31 May 2006 had the variation to the terms of the Waymark
acquisition as described above not taken place;
- The "Post the variation" column is the NTAV as disclosed in Simeka
BSG"s results for the financial year ended 31 May 2006;
- The effect of the variation to the terms of the Waymark acquisition on
earnings per share, headline earnings per share and net asset value
per share for the financial year ended 31 May 2006 is immaterial;
- The calculation in the "After" column is based on 345 946 000 shares
in issue.
Rosebank
17 August 2006
Designated advisor to Simeka BSG Limited
Java Capital (Proprietary) Limited
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.
Date: 18/08/2006 08:26:58 AM Produced by the JSE SENS Department
