ALARIS HOLDINGS LIMITED - Acquisition of Cojot OY

Acquisition of Cojot OY

Alaris Holdings Limited
Incorporated in the Republic of South Africa
(Registration number 1997/011142/06)
Share code: ALH ISIN: ZAE000201554
(“Alaris”)


ACQUISITION OF COJOT OY


1. INTRODUCTION

   The board of directors of Alaris Holdings Limited (“the Board”) is pleased to advise shareholders that
   Alaris has entered into a Share Purchase Agreement (“the Agreement”) with Ritva Haapanen, Mauri
   Haapanen, Teemu Haapanen and Erkki Valkeasuo (collectively hereinafter referred to as “the Sellers”)
   of Cojot OY (“Cojot”), in terms of which Alaris will acquire 100% of the issued share capital of Cojot and
   any and all shareholder loan claims that the Sellers have against the company (“the Acquisition”).

2. THE ACQUISITION

   2.1 Nature of the Cojot business
       Cojot, a Finnish limited liability company, having its registered domicile in Espoo, Finland, was
       incorporated in 1986 and specialises in the design, development and manufacture of mobile
       (vehicular and manpack) VHF/UHF/SHF wideband antennas. Cojot provides a broad range of high
       quality and sophisticated solutions for today’s demanding radio frequency systems used for tactical
       communication, electronic warfare and spectrum monitoring applications.

   2.2 The rationale for the Acquisition
       As announced on SENS on 30 September 2015, one of the main objectives of Alaris is to expand its
       footprint globally. European and the US markets have been identified as the best points of entry.
       Cojot is resident in the European market which will provide improved market access for the sales of
       other Alaris products.

       Alaris and Cojot operate in a similar market space and Alaris has been considering acquiring the
       business of Cojot since 2012. Cojot has consistently recorded profits since 2005. The management
       of Cojot have demonstrated sound business acumen and historical forecasts have been exceeded in
       most instances.

       The two business models are complimentary and the combined operations will well position Alaris to
       capitalise on new opportunities that will become available through cross-selling and through the
       design and development of products resulting from the combined skills set. Alaris will also gain
       access to the European supply chain, which in light of current local economic circumstances, has
       great value.

   2.3 Purchase consideration
       The total amount payable by Alaris to the Sellers as consideration for the Acquisition is
       EUR 3,738,013 (“Purchase Consideration”), which is payable in cash.

       Alaris shall pay the Purchase Consideration in two tranches as follows:

       1.      EUR 3,364,212 payable in immediately available funds on the last working day of the month
               in which all the conditions precedent set out in paragraph 2.4 below are fulfilled or waived
               (“Closing Date”); and

       2.      EUR 373,801 less any deduction in the case where the net surplus cash on Closing Date is
               less than EUR 1,375,570 due to any reason not arising in the ordinary course of business of
               Cojot and includes specifically any breach of the Agreement (“Non-operating Reduction”).
       
       The second tranche of the Purchase Consideration shall be reduced on a Euro for Euro basis to the
       extent of the quantum of the Non-operating Reduction and shall be payable within 3 business days
       following such determination.


   2.4 Conditions precedent and effective date
       The Acquisition is subject to the fulfilment or waiver of the following conditions precedent by no later
       than 30 June 2016:

       2.4.1.   Alaris obtaining the consent of the Ministry of Employment and the Economy of Finland for
                the lawful and valid execution of the Acquisition;

       2.4.2.   Alaris inspecting Cojot and its business (“Due Diligence”) and being satisfied with the Due
                Diligence;

       2.4.3.   no material breach of the warranties contained in the Agreement having taken place prior
                to the Closing Date; and

       2.4.4.   Alaris receiving the requisite exchange control required to implement the Agreement.

       The Acquisition will take retrospective effect from 1 January 2016 (“the Effective Date”).

3. SIGNIFICANT TERMS

   The Agreement contains warranties, representations and indemnities that are normal for a transaction of
   this nature.

4. THE VALUE OF, AND PROFITS ATTRIBUTABLE TO COJOT
   The value of the net assets that are the subject of the Acquisition, as at 31 December 2015, were
   EUR 2,190,001. The profits attributable to the net assets that are the subject of the Acquisition for the
   year ended 31 December 2015 were EUR 623,871.

5. CLASSIFICATION OF THE ACQUISITION
   The Acquisition is classified as a Category 2 transaction in terms of the Listings Requirements of JSE
   Limited and does not require Alaris shareholder approval.


4 March 2016

Transaction and corporate adviser
PSG Capital Proprietary Limited

Designated Adviser
Merchantec Capital

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