OMN - Omnia Holdings Limited - Omnia acquisition strengthens chemicals business Release Date: 16/08/2007 16:50:07 Code(s): OMN
OMN - Omnia Holdings Limited - Omnia acquisition strengthens chemicals business
Omnia Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number: 1967/003680/06
JSE code: OMN
Omnia acquisition strengthens chemicals business
Omnia, a diversified and specialist chemical services company which provides
customised solutions in the chemicals, mining and agriculture markets, wishes to
inform shareholders of its acquisition of the entire issued share capital of
Zetachem (Pty) Ltd ("Zethachem"), an established supplier of speciality
chemicals and chemical management systems to the water treatment and pulp and
paper industries for a consideration of R206 million ("the acquisition") to be
settled in cash. Due to a large cash surplus within Zetachem, that will become
available to Omnia, the effective consideration is a net R133 million.
The acquisition is conditional upon the granting of the requisite regulatory
approval from the Competition Commission.
Zetachem is established as a well entrenched supplier of speciality polymers and
chemical management systems to the leading companies in the water treatment,
mining and pulp and paper industries. It is also well recognised for innovative
chemical problem solving and is now an entrenched producer of organic coagulants
in Africa and in the southern hemisphere, generating turnover in excess of R160
This acquisition establishes Omnia as a meaningful participant in the potable
water treatment market and allows the company the strategic flexibility to
benefit from the strong demand for purified water and effluent water treatment,
which is underpinned by considerable infrastructure growth and development in
The acquisition of Zetachem builds on one of Omnia`s stated objectives to grow
the business and enhance margins through backward integration into production,
with growth opportunities arising from Zetachem`s production capabilities and
capacity, as well as the technology and equipment to facilitate toll production.
The plant has the potential to increase capacity significantly to produce
chemical products in excess of 55 000 tons per annum. The acquisition will also
enable growth into Sub-Saharan Africa region through Protea Chemicals` current
Strategic and geographic fit
Zetachem, which is based in Kwa-Zulu Natal, enhances the Chemical division of
Omnia`s geographic footprint in this area and will position Omnia to take
advantage of exciting new export opportunities in growing, dynamic markets.
Zetachem and Omnia`s businesses are built on the same fundamental imperative of
adding value to customers and this deal enables a host of operational and
strategic synergistic benefits to further strengthen and broaden the offering.
Intellectual Property and strong management experience
Zetachem maintains a technological edge through ongoing local Research and
Development and has strong relationships with some of the world`s leading
chemical manufacturers. Zetachem brings an experienced and skilled management
team, with a strong focus on service, quality and delivery.
The acquisition is targeted to be effective 31 October 2007.
Pro forma financial effects
The table below sets out the unaudited pro forma financial effects of the
The pro forma financial information has been prepared to illustrate the impact
of the acquisition on the reported reviewed provisional results of Omnia for the
twelve months ended 31 March 2007, had the acquisition occurred on 1 April 2006
for income statement purposes and on 31 March 2007 for balance sheet purposes.
The pro forma financial information is the responsibility of the directors and
has been prepared for illustrative purposes only and because of its nature may
not give a true picture of Omnia`s financial position after the acquisition.
Before After Percentage
the the change
transaction transaction (%)
Earnings per share (cents) 560,3 570,1 1.7%
Headline earnings per share 558,2 568,0 1.8%
Net asset value per share 2,844 2,844 0.0%
Net tangible asset value per 1,852 1,643 -11.3%
1. The "Before the acquisition" earnings per share and headline earnings
per share figures are based on the weighted average number of shares
in issue at 31 March 2007.
2. The adjustments to the earnings per share, and headline earnings per
share are based on the weighted average number of shares in issue at
31 March 2007 and are stated assuming that the acquisition is
effective 1 April 2006;
3. For net asset value and tangible net asset value calculations, it is
assumed that the acquisition is effective 31 March 2007 and based on
the actual number of shares in issue at 31 March 2007.
Categorisation of transaction
In terms of the Listings Requirements of the JSE Limited, the acquisition is
categorised as a Category 3 transaction. Accordingly, approval by Omnia
shareholders is not required.
16 August 2007
Barnard Jacob Mellet Corporate Finance
Date: 16/08/2007 16:50:07 Supplied by www.sharenet.co.za
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