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(REG NO 1997/008691/06)
("TREMATON")
ACQUISITION OF A SHAREHOLDING IN NEW AFRICA TECHNOLOGY HOLDINGS
1. INTRODUCTION
REAL AFRICA DUROLINK INVESTMENT BANK LIMITED IS AUTHORISED TO ANNOUNCE THAT,
FURTHER TO THE CAUTIONARY ANNOUNCEMENT PUBLISHED ON 26 MARCH 2000, TREMATON HAS
CONCLUDED AN AGREEMENT TO SUBSCRIBE FOR AN EFFECTIVE 11,59% SHAREHOLDING IN A
RESTRUCTURED AND RECAPITALISED NEW AFRICA TECHNOLOGY HOLDINGS (PROPRIETARY)
LIMITED ("NATH GROUP") ("THE ACQUISITION").
2. NATURE OF THE NATH GROUP'S BUSINESS
THE NATH GROUP IS A MULTI-DISCIPLINARY INFORMATION TECHNOLOGY GROUP WHICH
CURRENTLY HAS FOUR BUSINESS DIVISIONS OPERATING IN 16 MAJOR EUROPEAN AND ASIAN
PACIFIC LOCATIONS AS WELL AS IN SOUTH AFRICA. IT EMPLOYS SOME 1 200 PEOPLE,
WITH IN EXCESS OF 70% OF ITS BUSINESS BEING CONDUCTED OUTSIDE SOUTH AFRICA. ITS
BUSINESS DIVISIONS COMPRISE A PROPRIETARY SOFTWARE PRODUCT DIVISION, A SERVICES
DIVISION, A HARDWARE DIVISION AND AN ITVENTURE CAPITAL DIVISION. THE MAIN
ACTIVITIES OF THESE DIVISIONS ARE SUMMARISED AS FOLLOWS:
% HELD BY THE
DIVISION BUSINESS NATHGROUP DESCRIPTION OF BUSINESS
PROPRIETARY INDEPENDENT 85 INTEC IS A RAPIDLY GROWING UK
SOFTWARE TECHNOLOGY SYSTEMS BASED GROUP WHICH MARKETS,
PRODUCT (UK) ("INTEC") INSTALLS AND MAINTAINS ITS
PROPRIETARY SOFTWARE PRODUCT,
INTERCONNECT WHICH IS USED
FOR INTERCONNECT BILLING AND
SETTLEMENT BETWEEN TELECOMMS
OPERATORS. INTEC OPERATES ON
A GLOBAL BASIS AND IS THE
WORLD LEADER IN ITS
INTERCONNECT AREA OF FOCUS
AND HAS OVER 60 INSTALLATIONS
WORLDWIDE INCLUDING MAJOR
TELECOMS CUSTOMERS SUCH AS
FRANCE TELECOM, SWISSCOM AND
TELECOM ITALIA IN ITS
CUSTOMER LIST.
SERVICES ADAPTIVE SYSTEMS 83 SERVICES OFFERED INCLUDE:
(DENMARK, SWEDEN,
NORWAY) - IT STRATEGY DEVELOPMENT AND
CONSULTING
INTEC OY (FINLAND) 69 - SOLUTION SELECTION, PROJECT
MANAGEMENT
IOCORE
(SOUTH AFRICA) 100 - APPLICATION DEVELOPMENT
IOCORE (AUSTRALIA) 72 - ENTERPRISE SOLUTION
IMPLEMENTATION INCLUDING
IOCORE ERP APPLICATIONS AND
(WESTERN EUROPE) 75 BUSINESS INTELLIGENCE, WITH
(UK, IRELAND, PRODUCTS AND PARTNERS SUCH
FRANCE, BELGIUM, AS SAP, BAAN, J D EDWARDS,
HOLLAND) IBM, AND ORACLE
- E-BUSINESS
- OUTSOURCING
HARDWARE CWS (SOUTH AFRICA) 55 ENTERPRISE SERVER HARDWARE
SOLUTIONS PROVIDER IN SOUTH
AFRICA FOR PRODUCTS INCLUDING
HEWLETT PACKARD, COMPAQ, SUN
AND SILCON GRAPHICS FOR LARGE
COMPANIES AND GOVERNMENTAL
AND PARASTATAL ENTITIES.
VENTURE
CAPITAL MD SYSTEMS
(SOUTH AFRICA) 80 DEVELOPMENT OF PACKAGE
SOFTWARE FOCUSED ON THE
LOGISTICS INDUSTRY AND SOLD
AS PACKAGE SOFTWARE AND IN
ASP INTERNET FORM. INITIAL
PRODUCT IS DIRECTED AT THE
LOGISTICS INDUSTRY OFFERING
FREIGHT FORWARDING, CLEARING
AND EXPORT FUNCTIONS.
WEBFEAT
(SOUTH AFRICA) 100 DEVELOPMENT AND MARKETING OF
INTERNET SHARE TRADING
SYSTEMS WITH CLIENTS
INCLUDING STANDARD BANK AND
INVESTEC.
ROCCONSULTING
SYSTEMS (UK) 39 SAP VALUE ADDED RESELLER AND
PROVIDER OF RELATED SERVICES.
THE BALANCE OF THE SHARES IN THE VARIOUS BUSINESSES ARE HELD BY THE RESPECTIVE
MANAGEMENT OF THESE BUSINESSES.
3. RATIONALE FOR THE ACQUISITION
THE ACQUISITION IS CONSISTENT WITH TREMATON'S STRATEGY OF FOCUSING ON
INVESTMENTS IN THE TECHNOLOGY SECTOR WITH HIGH GROWTH PROSPECTS AND STRONG
MANAGEMENT.
THE DIRECTORS BELIEVE THAT TREMATON WILL DERIVE SIGNIFICANT BENEFITS THROUGH
THE RAPID DEVELOPMENT OF THE VARIOUS BUSINESSES WITHIN THE NATH GROUP, MOST OF
WHICH HAVE THE POTENTIAL TO LIST SEPARATELY IN THE COUNTRIES IN WHICH THEY ARE
BASED.
4. TERMS OF THE ACQUISITION
TREMATON HAS CONCLUDED AN AGREEMENT TO SUBSCRIBE FOR AN EFFECTIVE 11,59%
SHAREHOLDING IN A RESTRUCTURED NATH GROUP, WITH EFFECT FROM 5 APRIL 2000 FOR A
CONSIDERATION OF R58 580 000, PAYABLE IN CASH, AND SUBJECT TO THE CONDITIONS
PRECEDENT DETAILED IN 5 BELOW.
FURTHERMORE, TREMATON IS REQUIRED TO PROVIDE A GUARANTEE LIMITED TO R29 MILLION
AS WELL AS A PLEDGE OF ITS SHAREHOLDING TO THE NATH GROUP'S BANKERS AS SECURITY
FOR FUNDING FACILITIES MADE AVAILABLE TO THE NATH GROUP PURSUANT TO ITS
RESTRUCTURING. IN ADDITION TREMATON MAY BE REQUESTED TO PROVIDE A FURTHER
GUARANTEE LIMITED TO R42,1 MILLION TO SECURE ADDITIONAL FACILITIES FOR A
SUBSIDIARY OF NATH GROUP SHOULD THESE BE REQUIRED.
5. CONDITION PRECEDENT
THE ACQUISITION IS SUBJECT TO THE CONDITION PRECEDENT OF THE JOHANNESBURG STOCK
EXCHANGE GRANTING ITS REQUISITE APPROVALS.
6. FINANCIAL EFFECTS OF THE ACQUISITION
BEFORE AFTER
(CENTS) (CENTS) CHANGE
HEADLINE EARNINGS PER ORDINARY SHARE ("EPS")3,7 (5,2) (8,9) CENTS
NET ASSET VALUE PER ORDINARY SHARE ("NAV") 120,0 120,0 0%
THE TABLE ABOVE SETS OUT THE PRO FORMA FINANCIAL EFFECTS OF THE ACQUISITION ON
A TREMATON SHAREHOLDER BASED ON THE FOLLOWING ASSUMPTIONS:
- THE "BEFORE" EPS AND NAV IS EXTRACTED FROM THE 31 AUGUST 1999 AUDITED
FINANCIAL RESULTS;
- THE ACQUISITION WAS EFFECTIVE ON 1 SEPTEMBER 1998 FOR THE EFFECT ON EPS AND
31 AUGUST 1999 FOR THE EFFECT ON NAV;
- THE CASH CONSIDERATION WAS R58 580 000;
- THE AMOUNT IN THE EPS 'AFTER' COLUMN TAKES COGNISANCE OF THE INTEREST
FORFEITED AFTER TAX ON THE CASH UTILISED FOR THE ACQUISITION ASSUMING AN
INTEREST RATE AFTER TAX OF 10,5% AND THAT NO DIVIDEND OR OTHER INCOME WAS
RECEIVED FROM THE ACQUISITION;
- THE NAV REMAINS UNCHANGED BECAUSE THE CASH CONSIDERATION IS REPLACED BY THE
COST OF THE ACQUISITION;
- FOR THE PURPOSES OF CALCULATING EPS AND NAV, 74 375 000 AND 105 000 000
ORDINARY SHARES RESPECTIVELY WERE ASSUMED TO BE ISSUED.
IT IS IMPORTANT TO NOTE THAT TREMATON'S ACCOUNTING POLICY IS NOT TO CONSOLIDATE
OR EQUITY ACCOUNT ITS INVESTMENTS WHERE ITS SHAREHOLDING IS LESS THAN 20%. THE
EFFECT ON EPS DOES NOT REFLECT THE EXPECTED FURTHER BENEFIT FLOWING FROM THE
ACQUISITION.
7. CIRCULAR TO SHAREHOLDERS
A CIRCULAR, WHICH IS SUBJECT TO THE APPROVAL OF THE JSE, GIVING DETAILS OF THE
ACQUISITION IS BEING PREPARED AND WILL BE POSTED TO SHAREHOLDERS IN DUE COURSE.
DURBAN
14 APRIL 2000
INVESTMENT BANK AND CORPORATE ADVISER TO TREMATON
REAL AFRICA DUROLINK INVESTMENT BANK LIMITED
(REGISTRATION NUMBER 1987/005258/06)
SPONSORING BROKERS
SMITH BORKUM HARE
MERRILL LYNCH SOUTH AFRICA (PTY) LTD.
MEMBER OF THE JOHANNESBURG STOCK EXCHANGE
REGISTRATION NUMBER 1995/001805/07
JOINT LEGAL ADVISERS
GARLICKE & BOUSFIELD INC
REGISTRATION NUMBER 1977/003506/21
DITZ INCORPORATED
