Rlf - Rolfes Technology Holdings - Acquisition Of Leatherchem (pty) Ltd And Release Date: 28/11/2007 10:36:38 Code(s): RLF
RLF - Rolfes Technology Holdings - Acquisition of Leatherchem (Pty) Ltd and
ROLFES TECHNOLOGY HOLDINGS LIMITED
(Registration Number 2002/002715/06)
Share code: RLF ISIN: ZAE000096202
("Rolfes" or "the company")
ACQUISITION OF LEATHERCHEM (PTY) LTD AND FURTHER CAUTIONARY
Rolfes is pleased to announce that the company has entered into a sale agreement
with Leatherchem (Proprietary) Limited ("Leatherchem") on Thursday,
22 November 2007 in terms of which Rolfes purchased the entire issued share
capital in and claims against Leatherchem ("the transaction").
Background to Leatherchem
Leatherchem is a niche pigment pastes, dyes and colorant dispersions
manufacturer focusing on products in the leather, plastisol, vinyls, polyester
and ink industries. The company uses state of the art technology and equipment,
has been in existence for more than 20 years and is based in Cape Town. The
company distributes its products primarily in the coastal regions of South
Rationale for transaction
Rolfes has, in the past, manufactured dispersions primarily for the coatings
industries. The sectors and clientele served by Leatherchem, will not only add
new products to the Rolfes basket, but will also open up new sectors and
customers to Rolfes, enhance the technology base and increase the production
capacity of the current dispersion unit.
The acquisition of Leatherchem also provides the group with a foothold and
presence in the Cape Town market. Rolfes will be distributing the Leatherchem
products in the central and northern regions of South Africa and will export the
products into Europe and Africa.
The production facilities of Leatherchem are not at present fully utilised,
providing room for significant growth. Leatherchem will also be able to use
certain Rolfes manufactured pigments in its production process.
Terms of transaction
In terms of the sale agreement, Rolfes acquired the entire issued share capital
in and claims against Leatherchem, with effect from 1 July 2007, for a
consideration of R15 million. The purchase consideration is payable as to
R11 250 000 in cash and the issue of a number of ordinary Rolfes shares, to be
issued at a price equal to the 30-day volume weighted average price as at the
closing date, expected to be on or about 5 December 2007.
The sale agreement contains warranties and indemnities normal to a transaction
of this nature. The agreement is subject to certain suspensive conditions which
have all been fulfilled except for the conclusion of a lease agreement in
respect of the premises from which Leatherchem operates, which will be concluded
in the next few days.
The senior executives (including the vendor) have all signed two year service
and three year restraint of trade agreements.
Financial effects of transaction
The financial effect of the transaction on the audited headline earnings per
share, basic earnings per share, net asset value per share and net tangible
asset value per share of Rolfes for the year ended 30 June 2007, had the
transaction been effective 1 July 2006, is not material but is earnings and
Further cautionary announcement
Shareholders are referred to the cautionary announcement dated 9 November 2007
and are advised that caution is still required to be exercised when dealing with
their Rolfes shares as Rolfes has entered into fresh negotiations with another
third party which, if successfully concluded, may have a material effect on
Rolfes` share price.
28 November 2007
Designated and Corporate Adviser
PSG CAPITAL (PTY) LIMITED
Date: 28/11/2007 10:36:38 Supplied by www.sharenet.co.za
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