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RLF - Rolfes - Acquisition of AgChem and withdrawal of cautionary announcement
ROLFES TECHNOLOGY HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number: 2000/002715/06)
JSE Share Code: RLF
ISIN: ZAE000096202
("Rolfes" or "the Company")
ACQUISITION BY ROLFES OF 70% OF THE ISSUED SHARE CAPITAL OF AGCHEM HOLDINGS
(PROPRIETARY) LIMITED ("AGCHEM"): FURTHER ANNOUNCEMENT AND WITHDRAWAL OF
CAUTIONARY
1. Introduction
Shareholders are referred to the announcement published by Rolfes on 12
July 2011 wherein shareholders were advised that Rolfes had made a firm
offer to acquire 70% of the issued ordinary share capital of, and
shareholders loan accounts (if any) against, AgChem ("the Acquisition"),
which firm offer had been duly accepted.
2. Fulfilment of various conditions precedent
Further to the aforementioned announcement of 12 July 2011, Rolfes has
concluded:
* a commercial, legal and financial due diligence on AgChem to its
satisfaction; and
* a sale of shares and claims agreement with the respective vendors,
which incorporated:
- Andre Dafel (including the HAD Family Trust) and Andre Shoeman
(including entering into 3 year restraint of trade agreements,
to ensure that they do not and will not in the future for the
period of the restraint, compete materially with the existing
business of AgChem;
- Andre Dafel granting AgChem the right to commercialise certain
products formulated and/or manufactured by Andre Dafel, and
AgChem agreeing to purchase future packaging from Andre Dafel;
and
- warranties that are standard for a transaction of this nature.
3. Outstanding conditions precedent
The Acquisition remains subject to the fulfilment of the following
principal conditions precedent:
* Rolfes entering into a shareholders` agreement with the remaining
shareholders;
* Each of the remaining shareholders, Johan Pretorius and Stephan Naude,
entering into new employment contracts with AgChem;
* AgChem entering into lease agreements in respect of two properties
currently occupied by AgChem and its subsidiaries;
* Nedbank Limited, or any other registered bank or financial
institution, granting Rolfes the required credit facilities in respect
of the purchase consideration;
* the transfer of all banking arrangements to Nedbank, excluding fixed
term asset finance arrangements;
* the unconditional approval of the Acquisition by the Competition
Commission, as required, and if such approval is conditional, to such
conditions being acceptable to the parties concerned;
* any other regulatory approvals as may be required to implement the
Acquisition; and
* subject to certain specified exceptions, no circumstance, event or
matter, or combination of circumstances, events or matters, which has
or might reasonably be expected to have a material adverse effect on
the affairs, business, financial condition (including assets,
liabilities, prospects, results of operations or revenues), operations
and/or property of AgChem and its subsidiaries (taken as a whole),
having occurred before the effective date, being the date upon which
the last of the conditions precedent has been fulfilled or waived.
Rolfes shareholders will be advised as and when each of these conditions
precedent has been fulfilled.
4. Pro forma financial effects
The unaudited pro forma financial effects, for which the directors are
responsible, are provided for illustrative purposes only to show the effect
of the Acquisition on the earnings, headline earnings, diluted earnings and
diluted headline earnings per share as if the Acquisition had taken effect
on 1 July 2010 and on the net asset value and net tangible asset value per
share as if the Acquisition had taken effect on 31 December 2010. Because
of their nature, the unaudited pro forma financial effects may not give a
fair presentation of the Company`s financial position and performance. The
unaudited pro forma financial effects have been compiled from the unaudited
consolidated financial statements for the six months ended 31 December 2010
and are presented in a manner consistent with the format and accounting
policies adopted by Rolfes and have been adjusted as described in the
notes.
Before the After the Notes Change
Acquisition Acquisition (%)
(Note 1) (Note 2 and 3)
Earnings per share 14.8 16.8 4,6,7 13.5
Diluted earnings 14.8 16.8 4,6,7 13.5
per share
Headline earnings 14.9 16.8 4,6,7 12.8
per share
Diluted headline 14.9 16.8 4,6,7 12.8
earnings per share
Net asset value 145.2 155.6 5,6,7 7.2
per share
Tangible net asset 114.0 101.5 5,6,7 (11.0)
value per share
Weighted average 102 968 102 968 -
number of shares
in issue (`000)
Shares in issue 103 609 103609 -
(`000)
Notes:
1. The "Before the Acquisition" column reflects the unaudited results of
Rolfes for the six months ended 31 December 2010.
2. The "After the Acquisition" column reflects what the results would
have been had the Acquisition been effective for the full six month
period, for income statement purposes and as at 31 December 2010 for
balance sheet purposes.
3. The results for the 6 months ended 28 February 2011 pertaining to
AgChem have been extracted with adjustment from AgChem`s audited
annual financial statements for the twelve months ended 28 February
2011. The AgChem results for the six months to 28 February 2011 have
been adjusted in respect of the 30% shareholding in AgChem that Rolfes
is not acquiring.
4. Interest has been provided for using a rate of 9% p.a. (pre-tax) in
respect of the facilities to be utilised to fund the full
consideration in respect of the Acquisition.
5. The maximum future vendor liability of R8,25 million has been provided
for. Interest has been accrued for using a rate of 9% p.a. (pre-tax)
in respect of this liability.
6. Once off transaction costs in respect of the Acquisition of R2 million
(pre-tax) have been provided for.
7. Tax has been provided for using a rate of 28%.
8. Based on the audited results of AgChem for the six months ended 28
February 2011, the net assets of AgChem that are the subject of the
Acquisition amount to R29,6 million and the attributable earnings
amount to R5,2 million (i.e. Rolfes` 70% shareholding).
Shareholders should note that the results of AgChem have been extracted
from the audited results of AgChem for the year ended 28 February 2011 but
that these results have themselves not been audited or reviewed. Rolfes is,
however, satisfied with the quality of these accounts and the related
procedures adopted by AgChem and its incumbent auditors in extracting the
six months results to 28 February 2011 from the audited annual financial
statements of AgChem for the year ended 28 February 2011.
5. Withdrawal of cautionary announcement
Rolfes shareholders are advised that the cautionary announcement which was
last renewed on 12 July 2011 is hereby withdrawn.
Johannesburg
18 August 2011
Corporate Advisor and Designated Advisor:
Grindrod Bank Limited
Legal Advisor:
Werksmans Inc.
Date: 18/08/2011 07:05:01 Supplied by www.sharenet.co.za
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