| Fri 24 Nov 2006, 17:05 | | EOH - Acquisition of Bromide Technologies |
|
EOH
EOH
EOH - Acquisition of Bromide Technologies
EOH HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/014669/06)
Share code: EOH & ISIN: ZAE000071072
("EOH" or "the company")
ACQUISITION OF BROMIDE TECHNOLOGIES
1. Introduction
Further to the cautionary announcement dated 19 September 2006 and the renewal
of cautionary dated 30 October 2006, shareholders are advised that EOH has
reached agreement to acquire the business operations and investments of
Bromide Technologies ("Bromide"), from Bromide Technologies (Proprietary)
Limited, with the major shareholders being the Alves Family Trust, Louis
Steyn, Elton Lau and Gerard Stickling.
2. Rationale for the acquisition
EOH stated in its audited results for the year ended 31 July 2006 that it
intended to expand the company"s offerings to clients to include
infrastructure offerings as part of the strategy to deliver "end to end"
solutions. Bromide is a significant player in the infrastructure support
services arena, with a large client base and a strong history of delivery and
success.
3. Salient terms of the acquisition
The purchase consideration, which amounts to R30 million, will be settled
through a combination of cash, the issue or procurement of shares and the
settlement of vendor liabilities amounting to R9,7 million, R13 million and
R7,3 million respectively. Part of the purchase consideration is subject to
the attainment of certain profit after tax warranties, being R7,8 million and
R9,8 million in years one and two respectively. The effective date of the
acquisition is 1 November 2006.
4. Conditions precedent
The acquisition is conditional upon inter alia:
* the completion of a satisfactory due diligence by EOH;
* approval by the Competition Commission; and
* obtaining all necessary regulatory approvals.
5. Pro forma financial effects of the acquisition
Based on the audited results of EOH for the year ended 31 July 2006, the pro
forma financial effects of the acquisition on EOH are set out in the table
below. This pro forma financial information has been prepared for illustrative
purposes only and because of its nature may not give a true picture of the
financial position and results of operations of EOH, nor the effect and impact
of the acquisition on EOH going forward. The calculation of the pro forma
financial effects is the responsibility of the directors of EOH.
Before the After the Change
acquisition acquisition %
Earnings per share (cents) 63,4 69,7 9,9
Headline earnings per share 63,4 69,7 9,9
(cents)
Net asset value per share 213,3 225,3 5,6
(cents)
Net tangible asset value per 101,8 79,8 (21,6)
share (cents)
Number of shares in issue 70 538 72 569 -
(000"s)
Weighted average number of 59 118 61 149 -
shares in issue (000"s)
The pro forma financial effects in the "After the acquisition" column are
based on the published audited results of EOH for the year ended 31 July 2006,
adjusted as detailed below:
- The effect on the earnings and headline earnings per share is based on:
* The assumption that the acquisition was effected on 1 August 2005;
* Incorporating an un-audited pro forma profit after tax of R6,3 million
generated by Bromide, it"s subsidiaries and its investments for the 12
month period from 1 August 2005;
* an effective after-tax interest charge of 6,80% on the cash purchase
consideration, being the average effective after-tax prime interest rate,
minus 1%, for the 12 month period from 1 August 2005; and
* the assumption that the shares to be issued were in issue from 1 August
2005.
- The effect on net asset value and tangible net asset value per share is
based on the assumption that the acquisition had been implemented on 31
July 2006;
* the net asset value attributable to Bromide was R3,1 million;
* the intangible assets attributable to the acquisition of R26,9 million;
and
* the shares were issued at 640 cents per share being the price of EOH
shares on 23 November 2006.
6. Other matters
The articles of association of E-Secure Distribution (Proprietary) Limited and
Managed Print Solutions (Proprietary) Limited, being subsidiaries of Bromide,
will be amended to comply with the Listings Requirements of JSE Limited.
7. Withdrawal of cautionary announcement
Further to the above, shareholders are advised that they no longer need to
exercise caution when dealing in the shares of EOH.
Johannesburg
24 November 2006
Sponsor
Merchant Sponsors (Proprietary) Limited
Date: 24/11/2006 05:05:04 PM Produced by the JSE SENS Department
