CSG HOLDINGS LIMITED - Acquisition Of Revert Risk Management Solutions Proprietary Limited

Acquisition Of Revert Risk Management Solutions Proprietary Limited

CSG HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number: 2006/011359/06
Share Code: CSG
ISIN Code: ZAE000184438
(“CSG” or “Company”)


ACQUISITION OF REVERT RISK MANAGEMENT SOLUTIONS PROPRIETARY LIMITED

1     THE ACQUISITION

1.1     CSG is pleased to announce that it has concluded a sale of
        shares agreement (“Agreement”) with RTT Group Proprietary
        Limited (“Seller”) and Revert Risk Management Solutions
        Proprietary Limited (“Revert”), in terms of which it purchases
        from the Seller 100% of the issued share capital of Revert and
        certain moveable assets(“Acquisition”).

1.2     Revert conducts the business of risk and security management
        solutions.

2     RATIONALE FOR THE ACQUISITION

      The Acquisition aligns with CSG’s strategy to expand the
      Company’s divisions other than Staffing Solutions, both
      organically and through acquisitions. CSG’s current strategy
      focusses on expanding into service delivery businesses that are
      more technology based with a higher barrier to entry than its
      existing services. This Acquisition complements the group’s
      recent acquisitions in the security industry.

      CSG Security Services consists of various security companies, and
      are grouped together under “Alarm monitoring and Armed Response”
      and “Specialised Security and Risks Services” units.

      Stallion, the previous security acquisition, added substance to
      the Alarm monitoring and Armed Response unit, while the
      implementation of this Acquisition will result in CSG becoming a
      prominent mid-sized Specialised Security and Risks Services
      provider in Gauteng, with expansion possibilities in Natal and
      the Western Cape, and with other logistics companies.

      As a result of the implementation of the Acquisition, CSG will
      become a national, well-recognised security and risk service
      provider with a substantial contribution towards CSG’s revenue
      coming from the security industry.

3     EFFECTIVE DATE

      The Acquisition will be implemented on the third business day
      following the date on which all of the Conditions Precedent have
      been fulfilled (“Effective Date”).

4     PURCHASE CONSIDERATION

      The purchase consideration for the Acquisition is R100 000 000
      and shall be settled on the Effective Date in cash by way of
      electronic funds transfer into the Seller’s bank account.

5     CONDITIONS PRECEDENT

5.1     The Acquisition is subject to the fulfilment of various
        conditions precedent (“Conditions Precedent”) as summarised
        below:

5.1.1     the Acquisition is approved by the boards of directors of the
          Seller and CSG;

5.1.2     the shareholder of Revert has adopted a special resolution
          approving the Acquisition in terms of section 112 of the
          Companies Act No. 71 of 2008;

5.1.3     the unconditional (or on such condition as the person on whom
          the condition is imposed is willing to accept as confirmed
          by such person in writing) approval (or deemed approval) of
          the Acquisition by the Competition Commission in terms of
          section 12(2) of the Competition Act No. 89 of 1998;

5.1.4     the unconditional and irrevocable approval of FirstRand Bank
          Limited (acting through its division Rand Merchant Bank) for
          the change in control / shareholding of Revert pursuant to
          the implementation of the Acquisition is obtained; and

5.1.5     the unconditional and irrevocable approval of Nedbank Limited
          for the implementation of the Acquisition is obtained.

5.2     All Conditions Precedent are to be fulfilled on or before 17h00
        (GMT) on 1 May 2017, or such later date as may be agreed in
        writing between the parties on or prior to 30 April 2017.

6     FINANCIAL EFFECTS

6.1     The value of the net assets attributable to Revert amounts to
        R22,3 million, while the attributable profit after tax amounts
        to R13,5 million for Revert’s most recent financial year ended
        31 August 2016. Based on historical performance, the
        Acquisition will be value enhancing to CSG.

6.2     The financial information contained in this announcement has
        not been reviewed or reported on by CSG’s auditors.

7     OTHER TERMS

      The Seller, Revert and CSG have provided warranties and
      undertakings that are standard for an acquisition of this nature.

8     GENERAL

8.1     On implementation of the Acquisition, Revert will become a
        subsidiary of CSG. In this regard, the Company confirms that
        the requirements of paragraph 10.21 of schedule 10 of the JSE
        Listings Requirements will be complied with.

8.2     The Acquisition qualifies as a category 2 acquisition for CSG
        in terms of the JSE Listings Requirements.

30 March 2017
Pretoria

Sponsor to CSG
PSG Capital Proprietary Limited

Adams & Adams Attorneys
Competition Law Advisors

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