PSG Group/ PSL - PSG Konsult Acquires Multinet Makelaars

PSG Group/ PSL - PSG Konsult Acquires Multinet Makelaars                        
PSG GROUP LIMITED                                                               
Incorporated in the Republic of South Africa)                                   
Registration number 1970/008484/06)                                             
JSE share code: PSG  ISIN:  ZAE000013017                                        
("PSG Group")                                                                   
PSG FINANCIAL SERVICES LIMITED                                                  
Registration number 1919/000478/06                                              
JSE share code: PGFP  ISIN code: ZAE000060166                                   
("PSL")                                                                         
PSG KONSULT ACQUIRES MULTINET MAKELAARS                                         
1. INTRODUCTION                                                                 
1.1 PSG Group, through its wholly-owned subsidiary PSL, holds 80% of the        
ordinary issued share capital of PSG Konsult Limited ("PSG Konsult").           
1.2 Shareholders of PSG Group are advised that PSG Konsult has reached an       
agreement on 31 January 2006 in terms of which PSG Konsult will acquire Multinet
Makelaars (Pty) Limited and an associated company ("Multinet") from the         
shareholders of Multinet, which mainly comprise management and Swanvest (Pty)   
Limited ("the sellers").                                                        
1.3 The acquisition by PSG Konsult referred to in 1.2 above ("the transaction"),
constitutes a category 3 transaction in terms of the JSE Listings Requirements. 
This announcement is for information purposes only and no action is required by 
PSG Group shareholders with regards to the transaction.                         
2. DETAILS OF MULTINET                                                          
Multinet is active in the short-term insurance industry. Its headline earnings  
for the six month period ending 31 August 2005 was R12,5 million. At that date, 
the net asset value of Multinet was R53,7 million.                              
3. RATIONALE FOR THE ACQUISITION                                                
Through this acquisition, PSG Konsult is increasing its market share and        
expanding its client base to which its other services could be marketed.        
Furthermore, it is one of PSG Konsult"s objectives to increase its recurring    
revenue and this transaction will contribute thereto.                           
4. PARTICULARS OF THE ACQUISITION                                               
4.1 Subject matter of the acquisition                                           
All of the issued ordinary shares in Multinet as well as any loan claims that   
the sellers may have against Multinet.                                          
4.2 Acquisition consideration                                                   
The total purchase consideration of R180 million will be funded from available  
cash resources and is payable in three instalments. A first amount of R98 910   
000 is payable on the first business day following the date of fulfilment of the
last suspensive condition. The remaining balance will be paid in two instalments
as soon as possible after finalisation of Multinet"s respective results for the 
year ending 28 February 2007 and the six month period ending 31 August 2007.    
These payments are subject to a profit warranty and will be reduced if certain  
profit targets are not met by Multinet.                                         
4.3 Effective date                                                              
The effective date of the transaction is 1 March 2006.                          
4.4 Suspensive Conditions                                                       
The transaction is subject to and conditional upon the following unfulfilled    
condition: Obtaining of such regulatory approval as may be required by          
regulatory authorities, including the Competition Commission, by 30 April 2006. 
4.5 Articles of association                                                     
Multinet"s articles of association will be amended to conform with Schedule 10  
of the JSE Listings Requirements once the transaction becomes unconditional.    
4.6. Warranties                                                                 
Normal warranties for a transaction of this nature were provided by the sellers.
5. FINANCIAL EFFECTS                                                            
The pro forma financial effects of the transaction are presented for            
illustrative purposes only and because of their nature may not give a fair      
reflection of PSG Group"s financial position nor of the effect on future        
earnings after the transaction.                                                 
Set out below are the unaudited pro forma financial effects of the transaction, 
based on the unaudited consolidated financial results of PSG Group for the six  
months ended 31 August 2005. The directors are responsible for these pro forma  
financial effects.                                                              
                                   Audited     Pro forma  Change                
                                   Before      After the  (%)                   
the         Transacti                        

                                   transacti   on                               
                                   on          (cents)                          
                                   (cents)                                      
Earnings per share            84,1        88,8       5,6                   
     Headline earnings per share   101,1       105,7      4,5                   
     Net asset value per share     412         412        Nil                   
     Net tangible asset value per  328         192        (41,5)                
share                                                                      
1. The earnings and headline earnings per share figures in the "Pro forma After 
the transaction" column have been calculated:                                   
- on the basis that the transaction was effected on 1 March 2005; and           
- the consideration paid would have earned interest at an after tax interest    
rate of 6%.                                                                     
2. The net asset value and net tangible asset value per share figures in the    
"Pro forma After the transaction" column have been calculated on the basis that 
the transaction was effected on 31 August 2005.                                 
Stellenbosch                                                                    
31 January 2006                                                                 
PSG Capital                                                                     
Sponsor to PSG Group                                                            
Date: 01/02/2006 07:00:09 AM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department