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MZR - Mazor Group - Acquisition of a 50% interest in a business conducted by
Hulamin Extrusions (PTY) Limited and Renewal of cautionary announcement
MAZOR GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2007/017221/06)
Share code: MZR ISIN: ZAE000109823
("Mazor" or "the Company")
ACQUISITION OF A 50% INTEREST IN A BUSINESS CONDUCTED BY HULAMIN EXTRUSIONS
(PTY) LIMITED AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
1 Introduction
Further to the cautionary announcement dated 26 March 2010, shareholders
are advised that Mazor, through its subsidiary Mazor Aluminium (Pty)
Limited, has entered into agreements in terms of which Mazor has acquired
a 50% interest in a business conducted by Hulamin Extrusions (Pty) Limited
("Hulamin Extrusions") under the trading name Hulamin Building Systems
("Hulamin Building Systems"), including certain of the assets and
liabilities held by Hulamin Extrusions, for an estimated consideration of
R35 million ("the transaction").
2 Background to Hulamin Building Systems
Hulamin Building Systems markets and supplies a wide range of fenestration
systems including NuKlip, Technal and Hula-Bond (composite panel
architectural cladding) into the South African residential, commercial and
industrial markets. It also markets fenestration accessories such as
locks, handles, friction stays and silicon which complement the range.
Hulamin Building Systems prides itself in offering superior levels of
technical service and design expertise, and offers its customers technical
training and support, as well as estimating software and training for its
NuKlip and Technal brands.
Hulamin Building Systems has branches in Johannesburg, Cape Town, Durban
and Port Elizabeth.
3 Rationale for the transaction
Hulamin Building Systems enjoys a significant market share within the
aluminium industry. The transaction will enable Mazor to gain access for
its systems to an enlarged client base which would have been difficult to
obtain organically. It is envisaged that Mazor`s expertise, specifically
its intellectual property and highly developed skill-set, coupled with the
market presence of Hulamin Building Systems will enable the joint venture
to evolve into a highly profitable business.
4 Salient terms of the transaction
Salient features of the transaction include inter alia:
4.1. The effective date of the transaction will be 1 April 2010.
4.2. Mazor have acquired a 50% interest in Cyndara 193 (Pty) Limited
("Cyndara"), an entity housing the business conducted by Hulamin
Building Systems, including the following assets and liabilities held
by Hulamin Extrusions as at the effective date:
4.2.1 fixed assets;
4.2.2 inventories excluding obsolete stock;
4.2.3 debtors excluding debts which have been outstanding for a period
of 90 days or more;
4.2.4 intellectual property;
4.2.5. liabilities excluding liabilities relating to tax, the intended
closure of certain operating branches and certain employee
benefits; and
4.2.6. contracts relating to the business.
4.3. The consideration payable by Mazor will be finalised upon the determination
of the value of the inventories and debtors as referred to in paragraph 4.1
above.
4.4. The consideration payable by Mazor will be settled through:
4.4.1. the sale by Mazor to Cyndara of architectural systems and
intellectual property for R20 million; and
4.4.2. a cash payment to Hulamin Extrusions equivalent to the purchase
consideration less R20 million, divided by 2 (currently estimated
to be R15 million).
4.5. The consideration for the sale of the architectural systems as detailed in
paragraph 4.4.1 is subject to a price adjustment, dependent upon the
earnings before interest, tax, depreciation and amortisation of Cyndara
during the 3 years following the effective date. The maximum adjustment,
either upward or downward, amounts to R 6 million.
4.6. Mazor has entered into a shareholders agreement with Hulamin Extrusions
governing their relationship as shareholders of Cyndara.
5. Condition precedent
The transaction is subject to the fulfilment of the following suspensive
condition:
5.1. The approval, if required, by the Competition Authorities in respect
of the transaction being obtained.
6. Pro forma financial effects and renewal of cautionary announcement
In compliance with paragraph 9.15 of the JSE Limited Listings Requirements,
pro forma financial effects must be disclosed to provide information on the
impact of the transaction on the Company`s reported financial statements.
As the financial effects of the transaction have not yet been determined,
shareholders are advised to continue exercising caution when dealing in the
Company shares until such a time that the financial effects are released.
Cape Town
6 April 2010
Sponsor and corporate advisor: Bridge Capital Advisors (Pty) Limited
Attorneys: Webber Wentzel
Date: 06/04/2010 16:20:01 Supplied by www.sharenet.co.za
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