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RBX - Raubex - Shareholders of Raubex regarding the acquisition of B&E
International Holdings (Proprietary) Limited ("B&E") by Raubex
(Previously Lexpub 49 Investments Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2006/023666/06)
Share Code: RBX & ISIN: ZAE000093183
("Raubex" or "the Group")
ANNOUNCEMENT TO SHAREHOLDERS OF RAUBEX REGARDING THE ACQUISITION OF B&E
INTERNATIONAL HOLDINGS (PROPRIETARY) LIMITED ("B&E") BY RAUBEX
1. Introduction
Investec Bank Limited is authorised to announce that Raubex has entered
into an agreement with the shareholders of B&E to acquire the entire
issued share capital and shareholder claims against B&E ("the Proposed
Acquisition") for an aggregate purchase consideration of R513,000,000.
The Proposed Acquisition is subject, inter-alia, to the fulfillment of
the suspensive conditions, as set out in paragraph 4.4 below.
2. The Proposed Acquisition
Rationale for the Proposed Acquisition
2.1 Raubex is an infrastructure construction company focused on road
construction and rehabilitation, infrastructure development and the
supply of materials to the broader construction industry across southern
Africa. Raubex is a major beneficiary of the announced increase in
government infrastructure spend which, supported by generally buoyant
market conditions, has already started to flow through to the Group`s
order book.
The Proposed Acquisition will provide Raubex with additional technical
expertise and enhance Raubex`s existing capacity and geographic
footprint. B&E`s mobile and fixed crushing capability combined with its
commercial quarrying operations will complement and enhance the capacity
of Raubex`s Raumix division, as it positions itself to take full
advantage of the increased demand for its services across southern
Africa.
3. Background information on B&E
B&E is one of the leading independent mineral processing and crushing
contractors in southern Africa, serving mining clients and the broader
civil engineering construction market. B&E has a proud and successful 35
year operating history and has a widespread footprint within southern
Africa. The group is managed under three autonomous operating divisions:
3.1 Crushing division
B&E operates an extensive range of modern mobile crushing
equipment, ranging in both complexity and size. The division
produces and supplies aggregate to civil construction sites and
specialises in providing its clients with a steady and cost-
effective supply of aggregate.
B&E has achieved status as a specialised mobile crushing market
leader, amongst other things, through its vast experience within
its core market, the mobility and quick set-up of its plant and its
in-house ability to design and build mobile equipment.
3.2 Commercial division
B&E operates two commercial quarries located in Pretoria and
Cradock. In addition to supplying aggregates to the broader
construction industry, the division also supplies metallurgical
silica, silicon sand and ballast stone to a wide variety of
clients.
3.3 Mining division
The mining division targets clients that require specialist, value-
adding services, involving extraction, beneficiation, treatment and
transport, at their open-cast or dump operations. In addition to
the above services, B&E also designs and builds tailor-made mining
and processing plant to fit their client`s specific requirements.
4. Details of the Proposed Acquisition
4.1 The vendors of B&E
The vendors to the transaction ("the Vendors") together with their
relative shareholding in B&E have been set out in the table below:
Vendor name Shareholding (%)
NT Danoher Family Trust 39.85
Tobias Wiese Family Trust 12.66
Scott Danoher Investment Trust 7.26
Richard Till Family Trust 5.91
IG Fannin Investment Trust 5.05
Other employees 29.27
Total 100.00
4.2 Effective date
The effective date of the Proposed Acquisition is 1 July 2007. The
closing date of the Proposed Acquisition, being the expected date
of the fulfillment of all suspensive conditions, as have been set
out in paragraph 4.4. below, is anticipated to be on or about 31
March 2008.
4.3 Purchase Consideration
Raubex will acquire the entire issued share capital of B&E for a
total purchase consideration of R513 000 000 (five hundred and
thirteen million Rand) ("the Purchase Consideration"). The Purchase
Consideration will be discharged as follows:
* an issue of 9 029 677 new Raubex shares equating to R295 127
726 (two hundred and ninety five million one hundred and
twenty seven thousand seven hundred and twenty six Rand) which
will be issued to the Vendors; and
* cash to the amount of R217 872 274 (two hundred and seventeen
million eight hundred and seventy two thousand two hundred and
seventy four Rand) to be settled by either the private
placement of new Raubex shares to third parties or by the
utilisation of cash resources and/or debt facilities within
Raubex ("the Cash Consideration").
4.4 Suspensive conditions
The Proposed Acquisition is subject to, inter alia, the following
suspensive conditions:
4.4.1 Raubex finalising a confirmatory due diligence
investigation in respect of the B&E group companies, to
the satisfaction of Raubex, by no later than
31 January 2008; and
4.4.2 required regulatory approvals for the implementation of
the Proposed Acquisition are obtained by no later than 31
March 2008, including but not limited to any required
approval from the JSE Limited ("JSE"), Securities
Regulations Panel ("SRP"), Competition Authorities and
the Department of Minerals and Energy.
5. Financial effects on Raubex shareholders
The unaudited pro forma financial effects set out in the table below has
been prepared to assist Raubex shareholders to assess the impact of the
Proposed Acquisition on the earnings per share, headline earnings per
share, the net asset value and the tangible net asset value per Raubex
share for the six month period ending 31 August 2007. The pro forma
financial effects, as set out in the after column, have been prepared
for illustrative purposes only and because of their nature, they may not
fairly present Raubex`s financial position for the six month period
ending 31 August 2007.
It has been assumed for the purposes of the pro forma financial effects,
that the Proposed Acquisition took place with effect from 1 March 2007
for Income Statement purposes and on 31 August 2007 for Balance Sheet
purposes. The Directors of Raubex are responsible for the preparation of
the financial effects which have not been reviewed by the auditors.
Per Raubex share Before(cents) (1,3) After (cents) Change %
(2,4)
Earnings 79.8 87.9 10.1
Headline earnings 80.1 88.2 10.1
Net asset value 362.2 620.2 71.2
Tangible net asset 262.7 321.1 22.2
value
Number of shares in 162,130 177,402 9.4%
issue (`000)
Weighted issue number 162,130 177,402 9.4%
of shares (`000)
Notes:
1. The earnings and headline earnings per share, as set out in the
Before column, are based on the latest unaudited interim financial
information for the six month period ending 31 August 2007, as
published by Raubex on 6 November 2007 ("the Interim Financial
Information").
2. The earnings and headline earnings per share, as set out in the
After column, is based on the Interim Financial Information and the
unaudited management accounts for B&E, for the six month period
ending 31 August 2007. The calculations are based on the
assumptions that:
2.1 9 029 677 new Raubex shares (based on an average Raubex share
price of R32.68) were in issue from 1 March 2007;
2.2 ;and the Cash Consideration of R217 872 274 has been settled
through the placement of new Raubex shares at an issue price
of R34.90 per share, which is based on the volume weighted
average price of a Raubex share on Friday, 30 November 2007.
2.3 B & E`s profit after taxation for the fixed month period
ending 31 August 2007 equated to R26 507 579.
3. The net asset value and tangible net asset value per share, as set
out in the Before column, is based on the Interim Financial
Information.
4. The net asset value and tangible net asset value per share, as set
out in the After column, is based on Interim Financial Information
and the management accounts for the six months ended
31 August 2007 for B&E. The calculations are based on the
assumptions that:
4.1 9 029 677 new Raubex shares (based on an average Raubex share
price of R32.68) were in issue at 31 August 2007;
4.2 the Cash Consideration of R217 872 274 has been settled
through the placement of new Raubex shares at an issue price
of R34.90 per share, which is based on the volume weighted
average price of a Raubex share on Friday, 30 November 2007
and;
4.3 B & E nett asset value as at 31 August 2007 equated to
R150 482 892.
6. Categorisation
In terms of the JSE Listings Requirements the Proposed Acquisition has
been categorised as a Category 2 transaction.
7. Security Regulations Panel
In terms of the Code on Takeovers and Mergers and Rules of the SRP ("the
Code"), the Proposed Acquisition will be classified as an "affected
transaction". All parties to the Proposed Acquisition have agreed to
waive their rights under the Code.
Centurion
3 December 2007
Investment bank to Raubex Sponsor to Raubex Legal adviser to Raubex
(Investec Corporate Finance) (Investec Bank Limited) (Hofmeyer, Herbstein &
Gihwala )
Independent reporting Legal adviser to B&E Financial
accountants to Raubex communications adviser
to Raubex
(Malan du Preez) (Rushmere Noach) (College Hill)
Date: 03/12/2007 14:01:00 Supplied by www.sharenet.co.za
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