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MICROmega HOLDINGS LIMITED - ACQUISITION OF INTERMAP (PROPRIETARY) LIMITED ("INTERMAP") MICROmega HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (Registration number 1998/003821/06) JSE Share code: MMG ISIN: ZAE000034435) ("Micromega" or "the company") ACQUISITION OF INTERMAP (PROPRIETARY) LIMITED ("INTERMAP") 1. INTRODUCTION Further to the cautionary announcement published on 22 January 2004, the shareholders of MICROmega are advised that the company has entered into an agreement to acquire from the Ross Lewin Family Trust ("the Seller"), represented by Ross Lewin, the entire issued share capital of Intermap, with effect from 1 January 2004, for a total consideration of R11 million as detailed in paragraph 3 ("the acquisition"). Intermap is a company which develops customised web-based business management software and information visualisation tools. Intermap"s products are currently used by clients as risk management and working capital management tools. 2. RATIONALE FOR THE ACQUISITION Intermap has to date focused on the development of web-based solutions for both the private and public sector. Their solutions and products have not been actively marketed but have rather been developed and implemented in clients as a result of the demand driven environment within which the business has operated. MICROmega believes that the demand for Intermap"s solutions within MICROmega"s current client base coupled with market awareness for the solutions available from Intermap will result in high levels of earnings growth. 3. TERMS OF THE ACQUISITION 3.1 Acquisition, Consideration And Settlement Terms The consideration of R11 million is directly related to future profit warranties warranted by the Seller, and will be settled in cash and shares provided such warranties are met, as follows: * Payment 1: R2.40 million cash and 1.6 million shares of 1 cent each at premium of 99 cents will be settled on the 9 February 2004.
* Payment 2: R2.25 million on the 31 December 2004, on a warranted profit of R1.30 million after tax. * Payment 3: R2.25 million on the 31 December 2005, on a warranted profit of R1.43 million after tax.
* Payment 4: R2.25 million on the 31 December 2006, on a warranted profit of R1.57 million after tax. * Payment 5: R0.25 million on the 31 December 2007. 4. FINANCIAL EFFECTS OF THE ACQUISITION Had the acquisition been in effect for the 6 months ended 30 June 2003, there would have been no significant effect on MICROmega"s earnings per share, headline earnings per share or net asset value per share. Intermap"s net asset value on the effective date was R2.40 million and had their results been included in MICROmega"s last reporting period they would have made a net contribution of R0.56 million. However, in the medium to long term, significant benefits are expected to materialise as a result of the synergy between Intermap and MICROmega Revenue Management Services. MICROmega is consequently of the opinion that Intermap will be a material contributor to earnings growth in the future. 5. CONDITIONS PRECEDENT All conditions precedent relating to the acquisition have been fulfilled, except for the granting of the listing of the 1.6 million consideration shares by the JSE Securities Exchange South Africa ("JSE"). 6. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT Shareholders are advised that, as a result of the disclosure made in this announcement, caution is no longer required when dealing in their MICROmega shares and the cautionary announcement dated 22 January 2004 is hereby withdrawn. Johannesburg 9 February 2004 Sponsor: LPC Manhattan Sponsors (Pty) Ltd (Registration number 1999/024792/07) Date: 06/02/2004 04:53:04 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department
