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LHG - Litha Healthcare Group Limited - Announcement regarding the Acquistion of a further 15% of the Biovac Consortium (PTY) LTD ("Biovac") LITHA HEALTHCARE GROUP LIMITED (formerly known as Myriad Medical Holdings Limited) (Incorporated in the Republic of South Africa) (Registration Number 2006/006371/06) Share code: LHG ISIN: ZAE000144671 ("Litha Healthcare Group" or the "company") ANNOUNCEMENT REGARDING THE ACQUISTION OF A FURTHER 15% OF THE BIOVAC CONSORTIUM (PTY) LTD ("Biovac") 1 INTRODUCTION Shareholders are advised that Litha Healthcare Holdings Limited ("Litha") a subsidiary of Litha Healthcare Group has concluded an agreement in terms of which Litha has, with effect from 1 January 2011, acquired 150 ordinary shares in the capital of Biovac (constituting 15% of Biovac`s issued share capital)from Bionet Asia Co. Limited("the acquisition"). Biovac, in which Litha already has a 62.5% interest owns 52.5% of The Biological & Vaccines Institute of South Africa (Proprietary) Limited (the "Biovac Institute"). The Biovac Institute distributes paediatric vaccines from several major international pharmaceutical companies and is a supplier of paediatric vaccines to the South African Government. It is also in the process of developing the capacity to manufacture vaccines. The acquisition increases the effective holding of Litha in the Biovac Institute and is in line with Litha Healthcare Group`s intention of bolstering Litha`s strategic influence on local vaccine manufacturing capacity. 2 TERMS OF THE ACQUISITION The consideration for the acquisition is R11 700 000 payable in cash as to R5 850 000 upfront and a further R5 850 000 on the first anniversary of the upfront payment. The acquisition is unconditional and the agreement governing the acquisition contains terms normal for an agreement of its kind. 3 PRO FORMA FINANCIAL EFFECTS The pro forma financial effects set out below have been prepared for illustrative purposes only, to provide information on how the acquisition may have impacted on the historical results. The pro forma financial effects of the acquisition on Litha`s earnings per share for the six months ended 30 June 2010 are set out below. The pro forma financial effects of the acquisition on the net asset value per share, net tangible asset value per share and headline earnings per share are not material and have not been disclosed. Due to their nature, the pro forma financial effects may not fairly present Litha`s financial position, changes in equity, results of operations or cash flows after the acquisition. The pro forma financial effects are the responsibility of the directors of Litha. The pro forma financial effects have not been reviewed or reported on by Litha`s auditors. Unadjusted After the Percentage before the acquisition change acquisition
Earnings per share (cents) 7.5 8.0 6.6% Notes and assumptions: 1 The "Unadjusted before the acquisition" column is based on the published reviewed condensed consolidated interim results of Litha Healthcare Group for the 6 months ended 30 June 2010 which incorporate the results of Litha with effect from 1 May 2010, being the date of acquisition of Litha. 2 For the purposes of the "After the acquisition" column, the acquisition of the additional 15% of Biovac by Litha is assumed to be implemented on 1 January 2010 and accordingly incorporated in the results of Litha Healthcare Group with effect from 1 May 2010, being the date of acquisition of Litha, for earnings per share purposes. 3 The purchase consideration of R11 700 000 is to be settled as to 50% in cash in an amount of R5 850 000 and 50% using existing vendor facilities of R5 850 000. 4 Additional interest expense is assumed to be incurred in respect of the cash portion of the purchase consideration at 5% per annum and in respect of the vendor financing portion of the purchase consideration at 15% per annum. 5 Due to the increase in shareholding, Litha`s share of the additional net profit from Biovac has been calculated at approximately R240 000 for the 2 months ended 30 June 2010. 6 Transaction costs have been expensed in respect of the acquisition. These transaction costs have been assumed to be non-tax deductible. 7 The acquisition will be accounted for as a business combination in terms of IFRS 3 (revised). Accordingly, the difference between the attributable net asset value of Biovac of R13 971 821 and the purchase consideration resulted in negative goodwill of R1.158 million that has been directly recognised in the statement of comprehensive income. 4 RELATED PARTY TRANSACTION In terms of section 10.7 of the Listing Requirements, the transaction is classified as a small related party transaction as it constitutes an acquisition from a material shareholder of a subsidiary. Java Capital (Proprietary) Limited ("Java Capital") who were appointed as independent advisors, has concluded that the terms of the acquisition are fair to Litha Healthcare Group shareholders. A copy of Java Capital`s report will be available for inspection at the offices of the company Manta Place, Turnberry Office Park, 48 Grosvenor Road, Bryanston, 2021 for a period of 28 days from the date of this announcement. Johannesburg 3 March 2011 Sponsor and independent advisor Java Capital Date: 03/03/2011 14:05:09 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.
