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Distribution And Warehousing Network Limited - Announcement Regarding The
Acquisition Of 69,57% Of Incledon (Pty) Limited
DISTRIBUTION AND WAREHOUSING NETWORK LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1984/008265/06)
Share code: DAW ISIN: ZAE000018834
("Dawn")
ANNOUNCEMENT REGARDING THE ACQUISITION OF 69,57% OF INCLEDON (PTY) LIMITED
("Incledon")
1. Introduction
Further to the announcement dated 11 November 2003, Bishop Corporate Finance
(Pty) Limited is authorised to announce that DAWN has exercised its option to
unconditionally acquire the remaining 69,57% of the issued shares in Incledon
not already owned by Dawn ("the acquisition").
In terms of the JSE Limited Listings Requirements the acquisition is categorised
as a category 3 transaction.
2. Rationale for the acquisition
The acquisition affords Dawn the opportunity to expand its wholesale
distribution focus with a similar product range into new markets, i.e. into the
mining, industrial and petrochemical sectors, State, provincial and local
authorities as well as into infrastructural development, both locally and into
selected African export markets. In addition it also adds further critical mass
to Dawn"s logistical services division.
3. Description of the business of Incledon
Incledon is an investment company with its primary investment being a 74% equity
stake in Incledon-DPI (Pty) Limited ("IDPI").
IDPI was formed with effect from February 2003 as a joint venture between
Incledon and DPI Plastics (Pty) Limited ("DPI"), in terms of which the entire
business of Incledon and the wholesale trading business of DPI were acquired by
IDPI and the purchase consideration settled by an issue of shares in IDPI pro
rata to the assets acquired from respectively Incledon and DPI.
IDPI conducts business as a wholesale and engineering trading merchant mainly
dealing in piping systems, valves and related accessories for the mines, general
industry, State, provincial and local authorities as well as for civil
contractors.
4. Terms of the acquisition
Dawn has unconditionally acquired, with effect from 1 April 2006 ("the effective
date"), the remaining 69,57% of the total issued shares in Incledon for a
consideration of R33 818 450. The vendors of the shares are the PDI Consortium,
being primarily employees of IDPI.
The consideration payable in terms of the acquisition was settled by way of an
issue of new Dawn shares, being 3 676 000 Dawn shares at R9.20 per Dawn share.
5. Articles of association
As a consequence of the acquisition, Incledon has become a wholly-owned
subsidiary of Dawn. Dawn has instructed its legal adviser to confirm that the
articles of association of Incledon comply with Schedule 10 of the JSE Limited
Listings Requirements and, where they do not comply, to affect such changes
thereto so that they do comply with the said Schedule.
6. Pro forma financial effects
The unaudited pro forma financial effects provided below is the responsibility
of the directors of Dawn and is disclosed in order to provide investors with
information on the impact of the acquisition on the interim results for the six
months ended 31 December 2005.
The unaudited pro forma financial effects have been prepared in accordance with
International Financial Reporting Standards for illustrative purposes only and,
because of their nature, may not fairly present the financial position of Dawn,
changes in its equity or results of its operations or cash flows subsequent to
the implementation of the acquisition.
The unaudited pro forma financial effects of the acquisition on the headline
earnings, earnings, net asset value and net tangible asset value per Dawn share,
before and after the acquisition, are set out below:
Before After Change
Per Dawn share Notes (cents) (cents) (%)
Headline earnings 1 35,09 37,32 6,3
Earnings 1 35,09 37,32 6,3
Net asset value 2 164,07 181,48 10,6
Net tangible asset value 2 139,66 129,51 (7,3)
Notes:
1. The amounts in the "Before" column are based on the headline earnings and
earnings per Dawn share as reported in the interim results of Dawn for the six
months ended 31 December 2005. The amounts in the "After" column represent the
headline earnings and earnings that would have accrued per Dawn share for the
six months ended 31 December 2005 had the acquisition been effective from 1 July
2005.
2. The amounts in the "Before" column are based on the net asset value and net
tangible asset value per Dawn share as reported in the interim financial results
of Dawn for the six months ended 31 December 2005. The amounts in the "After"
column represent the net asset value and net tangible asset value per Dawn share
had the acquisition been effective from 31 December 2005.
Johannesburg
5 April 2006
Corporate adviser
Bishop Corporate Finance (Pty) Ltd
(Registration number 2000/012695/07)
Sponsor
Deloitte & Touche Sponsor Services (Pty) Ltd
(Incorporated in the Republic of South Africa)
(Registration number 1996/000034/07)
Legal adviser
Werksmans Incorporated
(Registration number 1990/007215/21)
Date: 05/04/2006 04:47:30 PM Supplied by www.sharenet.co.za
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