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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                                                                   
ISIN: ZAE000005153                                                              
("Omnia")                                                                       
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 
million.                                                                        
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   
South Africa.                                                                   
Growth Opportunities                                                            
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  
footprint.                                                                      
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       
acquisition.                                                                    
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%              
 (cents)                                                                        
Net asset value per share        2,844         2,844         0.0%              
 (cents)                                                                        
 Net tangible asset value per     1,852         1,643         -11.3%            
 share (cents)                                                                  
Notes:                                                                      
    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.                                                   
Bryanston                                                                       
16 August 2007                                                                  
Sponsor                                                                         
Barnard Jacob Mellet Corporate Finance                                          
Date: 16/08/2007 16:50:07 Supplied by www.sharenet.co.za                     
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