CSG HOLDINGS LIMITED - Further announcement regarding an acquisition and withdrawal of cautionary

Further announcement regarding an acquisition and withdrawal of cautionary

CSG HOLDINGS LIMITED
(Formerly M&S Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2006/011359/06)
JSE code:    CSG ISIN: ZAE000184438
("CSG" or "the Company")


FURTHER ANNOUNCEMENT REGARDING THE ACQUISITION OF A FURTHER 49%
INTEREST IN SIGNIFICANT SITE SERVICES PROPRIETARY LIMITED (“SSS (SA)”)
AND SIGNIFICANT SITE SERVICES MOZAMBIQUE LIMITADA (“SSS MOZAMBIQUE”)
(“THE ACQUISITION”) AND WITHDRAWAL OF CAUTIONARY


1.   Introduction

Shareholders are referred to the announcement published by the Company on 23 June 2014
(“the Announcement”) which sets out details of the Acquisition. The parties have now
entered into the separate full agreements (“Full Agreements”) referred to in the
Announcement. The terms and conditions of the Full Agreements do not vary materially from
those set out in the heads of agreement referred to in the Announcement. All conditions
precedent to the Acquisition have been met.

The aggregate purchase consideration for the Acquisition amounts to R61 238 433 being
R48 288 583 for a further 49% interest in SSS (SA) and R12 949 850 for a further 49%
interest in SSS Mozambique. The purchase consideration will be settled through a cash
payment of R4 000 000 with the remainder to be settled by the issue of new CSG shares.
The number of new CSG shares to be issued is to be determined based on the volume
weighted average price of CSG shares traded on the exchange operated by JSE Limited 30
days prior to the date on which the Full Agreements were entered into (“VWAP”). Based on
the VWAP of 197 cents, 29 055 042 new CSG shares are to be issued in consideration for
the Acquisition. The new CSG shares will be issued ex any dividend declared by CSG for
the 13 months ended 31 March 2014.

2.   Categorisation

Based on the consideration of R4 000 000 in cash and 29 055 042 new CSG shares, the
Acquisition is a Category 2 transaction in terms of the JSE Limited Listings Requirements
(“LRs”).

3.    Financial effects

The unaudited pro forma financial effects of the Acquistion (“Financial Effects”) on CSG?s
basic earnings per share (“EPS”), headline earnings per share (“HEPS”), fully diluted EPS,
fully diluted HEPS, net asset value per share (“NAVPS”) and net tangible asset value per
share (“NTAVPS”) are set out below.

The Financial Effects have been prepared in terms of the LRs and the Guide on Pro Forma
Financial Information issued by the South African Institute of Chartered Accountants
(“SAICA Guide”).

The Financial Effects have been prepared to illustrate the impact of the Acquisition on CSG?s
published reviewed results for the 13 Months ended 31 March 2014 as published on 30 June
2014 (“Year End Results”), had the Acquisition occurred on 1 March 2013 for consolidated
statement of comprehensive income purposes, and on 31 March 2014, for consolidated
statement of financial position purposes. The Financial Effects have been prepared using
accounting policies that comply with IFRS and are consistent with those applied in the Year
End Results.

The Financial Effects are the responsibility of CSG?s directors and have been prepared for
illustrative purposes only and, due to their nature, do not fairly present the financial position,
results of operation or cash flows of CSG after the Acquisition.


                                                        Before the       After the          Change
                                                       Acquisition     Acquisition               %
 EPS (cents)                                                 16.17           18.07           11.77
 Fully diluted EPS (cents)                                   16.00           17.90           11.90
 HEPS (cents)                                                16.02           17.98           12.22
 Fully diluted HEPS (cents)                                  15.86           17.81           12.30
 NAVPS (cents)                                                67.4            70.8            5.04
 NTAVPS (cents)                                               43.3            37.1         (14.32)
 Number of ordinary shares in issue at 31 March
 2014 („000)                                               387 954        417 009             7.49
 Weighted average number of shares in issue for
 the period ended 31 March 2014 („000)                     238 427        267 482            12.19
 Fully diluted number of shares in issue for the
 period ended 31 March 2014 („000)                         240 963        270 018            12.06
 
Notes:
1.   The “Before the Acquisition” column information has been extracted, without
     adjustment, from the Year End Results.
2.   The “After the Acquisition” column information is based on the “Before the
     Acquisition” column and after the following:
     2.1.      Taking into account the consideration for the Acquisition of R4 000 000 in
               cash and 29 055 042 new CSG shares.
     2.2.      The cash portion of the consideration is to be funded out of existing cash
               resources. Interest forgone on the cash resource (previously held on call) has
               been taken into account at an interest rate of 2.05%.
     2.3.      In calculating EPS, HEPS, fully diluted EPS and fully diluted HEPS, a
               decrease in the non-controlling interest was taken into account. The financial
               information relating to SSS (SA) and SSS Mozambique was extracted from
               the audited financial statements of these entities for the 13 months ended 31
               March 2014.
     2.4.      Transaction costs of R70 000 was assumed applicable to the Acquisition and
               was settled in cash.
     2.5.      Taking into account the first year amortisation of intangible assets.
     2.6.      Intangible assets are assumed to comprise 25% of the difference between the
               purchase consideration and the fair value of identifiable net assets of each of
               the target companies and have a remaining useful life of 2 years.
     2.7.      Goodwill is assumed to comprise 75% of the difference between the purchase
               consideration and the fair value of the identifiable net assets of each of the
               target companies.


WITHDRAWAL OF CAUTIONARY
Further to the publication of the Financial Effects, the cautionary statement as set out in the
Announcement is hereby withdrawn.


Johannesburg
25 July 2014


Sponsor
Sasfin Capital
(a division of Sasfin Bank Limited)

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