| Tue 13 Mar 2007, 8:00 | | KEL- Kelly Group Limited - Abridged prospectus |
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JSE
KEL
KEL- Kelly Group Limited - Abridged prospectus
Kelly Group Limited
(Formerly LogicalOptions Staffing (Proprietary) Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1999/026249/06)
Share code: KEL ISIN number: ZAE000093373
("the Kelly Group" or "the Company")
ABRIDGED PROSPECTUS
Abridged prospectus relating to:
- a private placing by way of an offer for subscription of a maximum of
34,520,702 new ordinary shares of R0.0001 each in the share capital of the
Kelly Group priced between R8.30 and R9.30 per share;
- a private placing by way of an offer for sale by Brait Private Equity
Funds of a maximum of 4,084,842 ordinary shares of R0.0001 each in the share
capital of the Kelly Group priced between R8.30 and R9.30 per share; and
- the subsequent listing of the Kelly Group on the JSE Limited ("JSE").
This abridged prospectus is not an invitation to the general public to
subscribe for the Kelly Group ordinary shares ("ordinary shares"). The private
placing is made to invited institutional investors, selected private clients
and invited retail investors only.
The purpose of this abridged prospectus is to provide parties participating in
the private placing and members of the investment community with information
relating to the Kelly Group, its operations, its directors and management and
financial information.
1. Introduction and rationale
The JSE has approved the listing of the entire issued share capital of a
maximum of 100,000,000 ordinary shares of the Kelly Group, with effect
from the commencement of business on 3 April 2007, in the `Support
Services - Business Training and Employment Agencies` sector of the JSE
lists under the abbreviated name `Kelly`.
Prior to the listing, a minimum capital amount of R280 million is needed
to be raised by the Kelly Group through a private placing of ordinary
shares to invited institutional investors, selected private clients and
invited retail investors only.
The proceeds from the private placing will be first applied to the offer
for subscription which will recapitalise and restructure the Company`s
balance sheet by repaying the shareholder loans owed to Brait Private
Equity Funds. Thereafter, the proceeds will be applied to the offer for
sale which will allow Brait Private Equity Funds to partially realise
their investment in the Company and will facilitate liquidity in the
trading of the Kelly Group shares.
The subsequent listing will also:
- enhance investors` awareness of the Kelly Group;
- facilitate direct investment in the Kelly Group; and
- provide investors with a market for trading the ordinary shares.
The private placing is subject to:
- raising a minimum capital amount of R280 million before expenses; and
- achieving a spread of shareholders acceptable to the JSE.
The opening date of the private placing is Tuesday 13 March 2007 and the
closing date is Monday 26 March 2007.
2. Overview of the Kelly Group
Kelly Group Limited, trading as the Kelly Group, is the parent company of
a group of businesses that are engaged in the provision of human capital
services and outsource solutions. Its activities include outsourcing,
recruitment and consulting services as well as business process
outsourcing (BPO) solutions. These services are designed to help raise a
company`s business performance by unlocking the full potential of its
human capital. Companies that elect to partner with the Kelly Group stand
to benefit from its:
- top brands, all focused in niche segments;
- proven track record in service delivery and years of experience in the
staffing industry;
- cost reductions through its ability to leverage economies of scale and
its state-of-the-art technology;
- access to the Kelly Group`s 300,000 plus database of potential candidates
and footprint of over 75 national branches;
- access to expert knowledge and experience in the field of staffing and
recruitment utilising an innovative approach to strategic staffing solutions.
Kelly pioneered the staffing industry in South Africa and has been at the
forefront of leading the evolution of recruitment;
- passionate, committed and highly skilled staff;
- commitment to best practice and service excellence; and
- promotion of all interests.
3. Prospects of the Company
The Kelly Group has built a strong platform of complementary businesses
with well-established brands and a diverse sector focus, from which it is
ideally positioned to exploit favourable trading conditions in both the
permanent placement and flexi-staffing services market. In addition, the
fragmented state of its industry, which has more than 3,600 registered
players, presents attractive opportunities for growth through acquisition
and consolidation.
South Africa`s robust economic growth rate and the Government`s
infrastructural development drive are generating an increasing demand for
skills outsourcing, human resource management and information technology
and back-office specialisation. The Group has embarked on an aggressive
campaign to establish and sustain a strong presence in these sectors. It
is also leveraging its proven expertise in the callcentre sector to
capitalise on Government`s initiative for the development of the BPO and
offshoring industries.
The Kelly Group`s flagship brand, Kelly, is already a market leader in
all forms of flexi-staffing and is focused on entrenching this position
and maintaining its high growth rate. The financial recruitment
operations have been expanded through the recent acquisition of Frontline
which, together with PAG and Accountants On Call, has given the Kelly
Group complete coverage of this sector, from clerical to the senior
executive level, both in the permanent placement and flexi-staffing
services market. The blue-collar staffing business, Kelly Industrial,
stands to benefit from the boom in the construction and logistics
industries in the run-up to the 2010 World Cup. InnStaff, which is
already the market leader in the catering and hospitality industry, will
also get a further boost leading up to the 2010 World Cup.
Internationally, MSquared and Collabrus are also set for growth. A key
trend in the American market is the development of specialist staffing
and consulting services and both companies provide these within niche
industry sectors where they are well established.
The Kelly Group has generated strong cashflows during the financial year
to 30 September 2006. The directors believe that the Kelly Group will
continue to generate strong cash flows in the South African operations
for the financial years ending 30 September 2007 and 30 September 2008.
The strong cash flow will be aided by the impact of the assessed tax loss
of approximately R140 million in the South African operations for the
2005 tax year.
4. Directors
The names, ages, business addresses, qualifications, occupations,
nationalities and brief curricula vitae of the Directors and senior
management are set out below:
4.1. Non-executive Directors
Director Business Abbreviated curriculum vitae
address
Moss 11 Alice Lane Moss obtained degrees in
Ngoasheng - 2nd Floor, West Economics and Politics (from
Chairman Wing UNISA in 1984), Industrial
(49) Standard Bank Sociology Honours (University of
South Building Natal, 1988) and an M.Phil in
African Sandton Development Studies (University
South Africa of Sussex, 1990). He was pivotal
2196 in the industrial policy
development of the African
National Congress and was the
economic advisor to President
Thabo Mbeki from 1995 to 2000.
He is also a co-founder of
Safika and sits on the boards of
Dimension Data Holdings plc and
Coega Development Corporation
(Proprietary) Limited. He is a
Safika appointed director.
Malcolm 3 Autumn Street Malcolm is a chartered
McCulloch Rivonia accountant who studied at the
(52) Johannesburg University of Cape Town (in
South South Africa 1976) and subsequently completed
African 2196 an Advance Management Programme
at Wharton in Pennsylvania, USA
(in 1990). Malcolm was
previously a director of Murray
& Roberts Holdings Limited and
is currently chief executive
officer of Wilderness Safaris
(Proprietary) Limited. He is
also a non-executive director of
Wilson Bayly Homes-Ovcon
Limited, Capital Africa Steel
(Proprietary) Limited and Symo
Limited.
John Gnodde 9 Fricker Road John is an executive director of
(42) Illovo Brait, having previously led the
South Boulevard management of the Brait Private
African Illovo Equity Funds. John joined Brait
South Africa in 1995 and has been responsible
2196 for investments in consumer
products, construction,
pharmaceutical manufacture,
beverages, resources, mobile
telecommunications and
recruitment outsourcing amongst
others. Prior to joining Brait,
John worked for Goldman Sachs
International in London from
1989 to 1995 where he served in
the investment banking division.
He is a graduate of the
University of Cape Town where he
completed a degree in commerce
in 1989. John is a Brait
appointed director.
Vulindlela 11 Alice Lane Vuli holds a B.Sc in Land
Cuba (51) 2nd Floor, West Surveying from the University of
South Wing Fort Hare obtained in 1978, a
African Standard Bank B.Sc in Information Systems from
Building UNISA obtained in 1986 and an
Sandton MBA from the London Business
South Africa School obtained in 1993. Vuli
2196 has solid experience in the
development and transformation
of public and private sector
organisations in South Africa as
well as extensive information
technology consulting experience
to the private sector. He is a
co-founder and the current chief
executive officer of Safika. He
is a Safika appointed director.
Rolf 9 Fricker Road Rolf, a chartered accountant,
Hartmann Illovo has spent the past six years in
(32) Boulevard corporate finance and private
South Illovo equity, during which time he has
African South Africa specialised in investing,
2196 mergers and acquisitions and
capital raising across a wide
range of industries in the
United Kingdom and South Africa.
Rolf is a graduate of the
University of the Witwatersrand
where he obtained a Bachelor of
Commerce with Honours
(Accounting) in 1996. He joined
Brait in 2003. Rolf is a Brait
appointed director.
4.2. Executive Directors
The executive directors have the responsibility for the day-to-day running
of the business and the execution of the Kelly Group`s strategy. There is
a clear division of responsibilities between the executive committee and
the Board.
Director Business Abbreviated curriculum vitae
address
Grenville 6 Protea Place Grenville spent many years with
Wilson - Cnr. Fredman Avis Limited ("Avis") in various
Chief Drive positions including managing
executive Sandton director of Avis Rent-a-Car
officer (53) South Africa Southern Africa. After Avis
South African 2196 listed in 1997, he was appointed
as chief operating officer and
later as chief executive officer
of Avis Southern Africa until
the company delisted following
its acquisition by Barloworld
Motor Holdings. Grenville also
serves on the board for Tourism
Business Council of South Africa
and is also the chairman of the
Kurisani Trust. Grenville
completed his studies at the
University of Cape Town and
qualified as a chartered
accountant in 1980.
Johan du Toit 6 Protea Place A chartered accountant (after
- Chief Cnr. Fredman completing a BCompt (Hons), CTA
financial Drive at UNISA in 1989), Johan has
officer (41) Sandton extensive financial experience
South African South Africa in the running of the Kelly
2196 Group`s accounting functions. He
commands specialist skills in
software re-engineering,
networks and the development of
intranets and human resource
workflows, as well as tracking
systems.
Gayleen 6 Protea Place Gayleen joined the Kelly
Baxter - Cnr. Fredman Personnel Group in 1984 where
Chief Drive she served as general manager,
operating Sandton marketing manager, national
officer (47) South Africa corporate accounts director and
South African 2196 operations director. In 1998 she
was appointed managing director
of Kelly and appointed to the
Kelmac board of directors. She
was appointed as group
operations director for the
Kelly Group in 2002.
4.3Alternates to directors of the Kelly Group
Alexander 111 Sutter Alex obtained a BSc First Class
Dodd (47) Street Honours degree in civil
(Alternate to Suite 850 engineering and an MSc degree in
Grenville San Francisco management science from Imperial
Wilson) California College, University of London
British USA obtained in 1981. He has been
the chief executive officer of a
number of companies in South
Africa and the United States and
has also advised a number of
private equity firms and their
portfolio companies on growth
and turnaround strategies. He is
currently the chief executive
officer of MSquared
Incorporated.
Kholofelo 11 Alice Lane Having obtained qualifications
Molewa (26) 2nd Floor, West in Law and Tax from the
(Alternate to Wing University of Witwatersrand in
Vulindlela Standard Bank 2004, Kholofelo has worked in
Cuba) Building different areas of investment
South African Sandton banking, including corporate and
South Africa structured finance. Having been
2196 involved in the acquisition and
leverage finance units for First
National Bank Private Clients
and Rand Merchant Bank Private
Bank, his experience ranges from
deal making to policy and
strategic implementation (for a
period of 2 years from 2005 to
2006). He was appointed as an
executive at Safika in 2007.
Marc Ber, who is the chief financial officer of Safika, was the previous
alternate director to Vuli Cuba. At the Board meeting held on 12 February
2007, Kholofelo Molewa replaced Marc Ber in that capacity.
It is intended that, post the last practicable date but prior to the date
of listing, Vuyi Radebe and Mashoele Elias Monage will be appointed as
executive directors of the Kelly Group. Their profiles are tabled below:
Vuyisile 6 Protea Place Vuyi holds a BA degree from
Radebe (33) Cnr. Fredman Dartmouth College in the USA
(Alternate to Drive obtained in 1995. He has worked
Malcolm Sandton in corporate finance, private
McCulloch) - South Africa equity and strategy consulting
Deputy chief 2196 and has experience across a wide
executive range of industries. Prior to
officer joining the Kelly Group in 2004,
South African he was a consultant with Bain &
Company in South Africa and the
USA.
Mashoele 6 Protea Place Mashoele has extensive
Elias Monage Cnr. Fredman experience in labour and
(41) - Group Drive industrial relations, having
human Sandton held key labour consultant and
resource South Africa negotiator positions at National
executive 2196 Union of Metalworkers of South
South African Africa, Jay Pema and Associates
as well as the D & T Trust.
Prior to being appointed as the
Kelly Group`s human resource
executive, he was the director
for organised labour and
Government at Kelly Industrial.
He sits on the boards of many
committees including the
National Skills Authority and
the Metal and Engineering
Industries Bargaining Council
and is the vice-president of the
Association of Personnel Service
Organisations and CAPES. He is
currently completing his Masters
degree in engineering business
management.
5. Share Capital
The authorised and issued share capital of the Kelly Group, before and
after the private placing, is set out below:
Rand
Authorised share capital of the Kelly Group
before and after the private placing
1,000,000,000 ordinary shares of R0.0001 each 100,000
Issued share capital of the Kelly Group before
the private placing
65,479,298 ordinary shares of R0.0001 each 6,548
Share Premium 55,790,557
Issued share capital of the Kelly Group after
the private placing
A maximum of 100,000,000 ordinary shares of 10,000
R0.0001 each
Share premium* 332,324,003
* Calculated using an assumed issue price of R8.30, being the bottom of
the range of the subscription price per Kelly Group share and allowing
for the write-off of certain listing costs amounting to R9,984,902.
All the issued shares of the Kelly Group are of one class, namely
ordinary shares with a nominal value of R0.0001 each, ranking pari passu
in all respects. Subject to the minimum capital amount of R280 million
being raised and the shareholder spread requirements of the JSE Listings
Requirements being achieved, the entire issued share capital of the Kelly
Group will be listed on the JSE. The securities will be issued in
dematerialised form.
6. Copies of this prospectus
Copies of this prospectus (in English only) can be obtained by qualifying
investors during normal business hours from Tuesday 13 March 2007 to
Monday 26 March 2007, both days inclusive from the Company`s registered
office.
The registered office of the Kelly Group:
6 Protea Place
Cnr. Fredman Drive
Sandton
2196
(P O Box X44, Benmore, 2010)
Sandton
13 March 2007
Bookrunner, merchant bank and sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Reporting accountants and auditors
GRANT THORNTON
Attorneys
READ HOPE PHILLIPS THOMAS AND CADMAN INC.
Date: 13/03/2007 08:00:01 Produced by the JSE SENS Department.
