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SNV - Santova Logistics Limited - The Acquisition Of Mcgregor Customs (Pty) Ltd And Withdrawal Of Cautionary Announcement SANTOVA LOGISTICS LIMITED (Registration Number: 1998/018118/06) ("Santova" or "the Company") Share Code: SNV ISIN: ZAE000090650 THE ACQUISITION OF MCGREGOR CUSTOMS (PTY) LTD AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT INTRODUCTION Further to the cautionary announcement published on SENS on 31 October 2008, River Group is authorised to announce that, subject to the conditions precedent set out below Santova has purchased 100% of McGregor Customs (Pty) Ltd ("McGregor") from Coolaroo Holdings (Pty) Ltd ("Coolaroo") for approximately R12,5 million with effect 01 July 2008. THE ACQUISITION OF MCGREGOR CUSTOMS (PTY) LTD ("Transaction") McGregor is an Australian (Sydney) owned company, specialising in customs brokerage, trade facilitation and international freight forwarding. They are licensed by the Australian Customs Service, holding licence number 719. They are accredited by the Australian Quarantine and Inspection Service, accreditation number 1119. The company is a foundation member of the Customs Brokers and Forwarders Council of Australia of which Glenn McGregor is a Fellow member. Glenn McGregor founded the company in 1988 and has established a quality diverse client base of approximately 160 clients most of whom have been with the company for approximately 15 years. On fulfillment of the conditions precedent, Santova will settle the purchase price as follows: - cash AUS $ 1 080 000 (R7 560 000); and - the issue of 61 200 014 Santova ordinary shares at an issue price of 8 cents per share. Santova acquiring 100% of the issued share capital in and the sale claims that the shareholder will have against McGregor Customs (Pty) Ltd. Coolaroo warrants that the accumulative profit after tax for the years ending 30 June 2009 and 30 June 2010 will not be less than AUS $ 800 000. Should the profit warranty not be achieved, the purchase price will be reduced by Coolaroo returning (by the return of capital without consideration) to Santova the number of shares allotted and issued (at 8 cents) to the extent that the above warranty is not achieved. RATIONALE The underlying rationale for the acquisition includes the following: Santova`s clients who import from China/Hong Kong to South Africa also ship the same goods from China/Hong Kong to Australia. This constitutes a captive client base whose business will boost the target company`s earnings with immediate effect, particularly with Santova having its own offices in Hong Kong and China. Santova`s own offices in China/Hong Kong have shipments moving to Australia, which can now be allocated to the target company - enhancing earnings. Patent International, Santova`s partner in China, has confirmed that they will as an organization use the target company as their agent/representative in Australia, which will result in significant volumes/revenue for the target company. In consideration of the above, such an acquisition represents a huge opportunity for Santova to `unlock` significant value for the Group in Australia. CONDITIONS PRECEDENT The transaction is subject, inter alia, to the fulfilment of the following conditions precedent: - the completion of a due diligence to the satisfaction of the board of Santova on or before 15 December 2008; - obtaining approval of the SARB, JSE, SRP and all other regulatory authorities and consents where applicable; and - finalising employment or service contracts with key employees. FINANCIAL EFFECTS The financial effects of this transaction will be published after finalisation of the due diligence and fulfillment of all the conditions precedent. WITHDRAWAL OF CAUTIONARY Shareholders are referred to the cautionary announcement dated 31 October 2008, and are advised that caution is no longer required to be exercised by shareholders when dealing in their securities. 05 November 2008 Durban Designated Advisor River Group Date: 06/11/2008 07:30:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
