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AMA - Acquisition by AMAP of the businesses of SAMMEG, SAMSAT (CAPE) and SAMSAT
(KZN) ("the acquisition") and renewal of the cautionary announcement
Amalgamated Appliance Holdings Limited
(Registration number 1997/004130/06)
(Incorporated in the Republic of South Africa)
Share code: AMA ISIN: ZAE000012647
("AMAP" or "the Company")
ACQUISITION BY AMAP OF THE BUSINESSES OF SAMMEG, SAMSAT (CAPE) AND SAMSAT (KZN)
("THE ACQUISITION") AND RENEWAL OF THE CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
On 13 June 2011, a wholly-owned subsidiary of Amalgamated Appliance Holdings
Limited, Tedelex Trading (Proprietary) Limited ("Tedelex" or "the Purchaser")
entered into a sale of business agreement ("the Sale Agreement") with Sammeg
Satellite (Proprietary) Limited ("Sammeg"), Samsat (Cape) (Proprietary) Limited
("Samsat (Cape)"), Samsat (KZN) (Proprietary) Limited (Samsat (KZN)
(collectively, "the Sellers"), Sean Claude Meadows, Joel Kevan Dorfan and
Michael Roy Weinberg to acquire the business of each of the Sellers as going
concerns.
2. THE BUSINESSES OF THE SELLERS
The Sellers are wholesalers and manufactures of television and satellite
reception equipment as well as a range of accessories and products including
television arms, terrestrial antennas and electronics, remote extenders and wall
brackets.
3. SALIENT FEATURES OF THE ACQUISTION
The Purchaser will acquire from the Sellers all of the assets which are required
for the continued operation of the businesses (including the brands and
trademarks of the Sellers, certain property, plant and equipment, contracts and
inventory stock,).
Save for the Sellers` liability in respect of staff leave and severance pay on
the last business day of the month during which the last of the suspensive
conditions to the Sale Agreement is fulfilled ("Completion Date"), which will be
assumed by the Purchaser, no other liabilities (including contingent
liabilities) of the Sellers as at the Completion Date will be assumed by the
Purchaser. The Sellers will pay to the Purchaser an amount equal to the staff
leave as at the Completion Date.
The Purchaser shall automatically be substituted as the employer in the place of
the Sellers in respect of all of the contracts of employment in existence, in
terms of the Labour Relations Act.
4. PURCHASE CONSIDERATION
The purchase consideration payable by the Purchaser to the Sellers will be equal
to R53 million , subject to adjustments which may be made depending on the value
of the inventory stock on the Completion Date. The maximum increase to the
purchase consideration may be R16 million
On the second business day following the Completion Date, R40,5million will be
paid by the Purchaser directly to the Sellers and R12,5 million shall be paid
into an escrow account.
An amount of R500 thousand will be retained in escrow and will be used to settle
any claims made against the Purchaser under product warranties provided by the
Sellers to its customers for products sold prior to the Completion Date.
Subject to the value of the inventory stock at the Completion Date, the
remaining R12 million retained in the escrow account will be released to the
Sellers or the Purchaser, as the case may be.
5. RATIONALE OF THE TRANSACTION
The intention of the acquisition is to expand AMAP`s current accessories
business by adding additional product categories and widening the channels to
market. Furthermore, this will assist AMAP`s expansion into sub-Saharan Africa
and the Indian Ocean Islands.
6. CONDITIONS PRECEDENT
The Acquisition is subject to, inter alia, the fulfilment of the following
conditions precedent:
- the approval of the transaction by the Competition Authorities;
- the shareholders of each of the Sellers passing a special resolution in
terms of section 115 of the Companies Act No. 71 of 2008 approving the sale
of the respective Businesses;
- the written consent of the third parties to those contracts which have been
deemed to be material to the Purchaser being obtained; or alternatively,
the Purchaser concluding new contracts with the third parties to those
contracts which have been deemed to be material to the Purchaser,
- Tedelex confirming that it has been satisfied with the outcome of its due
diligence investigation into the businesses of each of the Sellers;
- Sean Meadows entering into a service, confidentiality and restraint
agreement with the Purchaser on terms and conditions reasonably acceptable
to the Purchaser; and
- the Purchaser entering into agreements on terms acceptable to it, with a
certain principal in terms of which the Purchaser will, amongst other
things, be appointed as a wholesaler of that principal`s decoders and
accessories as well as a service integrator;
- notices of the transaction being published in terms of section 34 of the
Insolvency Act 24 of 1936 (as amended) and the Purchaser being satisfied
that no claims have been made as a result thereof or if claims have been
made, such claims are settled on terms acceptable to the Purchaser;
In addition to the suspensive condition referred to above, the Sale Agreement is
subject to a resolutive condition that the Sale Agreement shall terminate and be
of no further force and effect if the Purchaser notifies the Sellers at any time
prior to the date that any payment is required to be made to the Sellers by the
Purchaser in terms of the Sale Agreement that the Purchaser`s board of
directors have failed to approve of the transaction set out in the Sale
Agreement.
7. FINANCIAL EFFECTS OF THE ACQUISITION AND RENEWAL OF THE CAUTIONARY
ANNOUNCEMENT
In compliance with paragraph 9.15 of the JSE Listings Requirements, pro forma
financial effects must be disclosed to provide information on the impact of the
acquisition on AMAP`s reported financial statements. The financial effects of
the acquisition will be tabled once the audited financial statements for the
Sellers have been finalized. Shareholders are advised to continue exercising
caution when dealing in the Company shares until such a time that the financial
effects are released.
Johannesburg
14 June 2011
Sponsor: Bridge Capital Advisors (Proprietary) Limited
Attorneys to the Sellers- Fluxmans Attorneys
Attorneys to the Purchaser - Eversheds
Date: 14/06/2011 12:09:01 Supplied by www.sharenet.co.za
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