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ADI - Adaptit Holdings Limited - Acquisition of BI Planning Services
(Proprietary) limited
ADAPTIT HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1998/017276/06)
Share code: ADI ISIN: ZAE000113163
("ADAPT IT" or "the Group")
ACQUISITION OF BI PLANNING SERVICES (PROPRIETARY) LIMITED
1. INTRODUCTION
The board of directors of ADAPT IT ("the Board") is pleased to advise
shareholders that agreement has been reached between ADAPT IT and the
vendors specified below ("the Vendors") of BI Planning Services
(Proprietary) Limited ("BIPS"), pursuant to which ADAPT IT has acquired
100% of the issued share capital ("sale shares") in, and all claims
("sale claims") against, BIPS from Johannes Hendrik Strydom, Cornelius
Johannes Lubbe, Frederik Wilhelmus van Greune and Mpika Manyathi ("the
Acquisition").
2. THE ACQUISITION
2.1 Nature of the BIPS business
BIPS was established in 2001 and specialises in Business Intelligence
Services in the Financial Services, Healthcare, Telecommunications and
other sectors. These services include Data Warehousing, Performance
Management Services, end user support, the provision of highly
specialised resources and applications, recruitment, and end user
training. BIPS is certified in leading technologies and has a highly
qualified total staff complement of over 50, with its head office
located in Midrand, Johannesburg. BIPS is ideally placed to provide its
clients with specialised services to optimise their business
performance through delivering business intelligence and related
services in complex ICT environments.
2.2 The rationale for the Acquisition
The Board believes that the Acquisition provides ADAPT IT with
expertise and solutions which will enable value adding services to be
extended to the Group`s existing clients as well as access to new
sectors and an increased presence in Gauteng. BIPS has a strong organic
growth track record, strong entrepreneurial management and a blue chip
client base, which will benefit from the Group`s wider service
offering.
2.3 Purchase consideration
The purchase consideration is R17.25 million and is warranted by profit
warranties of R8.7 million and R6.4 million net profit before interest
and tax in the first warranty period (being the first eighteen months
ending 30 June 2013) and the second warranty period (being the year
ending 30 June 2014) respectively. The purchase consideration will be
settled by way of a cash consideration of R8.626 million, funded from
existing cash resources, and the issue of 12 182 460 ADAPT IT shares,
valued at R8.626 million. The cash consideration is payable with
interest by 31 January 2012 and the ADAPT IT shares must be issued by 9
January 2012. A working capital facility of R6 million will be raised
by BIPS post the Acquisition. In the event that the profit warranties
are not met, the purchase consideration will be reduced by up to a
maximum of 50% according to an agreed-upon formula based on the extent
to which the profit warranties have not been met. The Vendors have also
provided standard warranties relating to BIPS.
2.4 Conditions precedent and effective date
All conditions precedent have been met with formalities being concluded
and closing having occurred on 31 December 2011. The effective date of
the acquisition is 1 January 2012.
2.5 Memorandum of incorporation
As BIPS is now a subsidiary of ADAPT IT, the memorandum of
incorporation of BIPS is to be amended to comply with Schedule 10 to
the JSE Listings Requirements as well as the Companies Act 2008.
3. PRO FORMA FINANCIAL EFFECTS OF THE ACQUISITION
The table below sets out the unaudited pro forma financial effects of
the Acquisition, on ADAPT IT`s earnings per share, headline earnings
per share, net asset value per share and tangible net asset value per
share.
The unaudited pro forma financial effects have been prepared to
illustrate the impact of the Acquisition on the reported financial
information of ADAPT IT for the year ended 30 June 2011, had the
Acquisition occurred on 1 July 2010 for statement of comprehensive
income purposes and as at 30 June 2011 for statement of financial
position purposes. The unaudited pro forma financial effects have been
prepared using accounting policies that comply with International
Financial Reporting Standards and that are consistent with those
applied in the annual financial statements of ADAPT IT for the year
ended 30 June 2011.
The unaudited pro forma financial effects, which are the responsibility
of the directors, are provided for illustrative purposes only and,
because of their pro forma nature may not fairly present ADAPT IT`s
financial position, changes in equity, results of operations or cash
flow.
Before the After Percent
Acquisition the age
Acquisit change
ion (%)
Basic earnings per share 11.36 12.46 9.68
(cents)
Headline earnings per share 11.46 12.55 9.59
(cents)
Net asset value per share 49.52 51.73 4.46
(cents)
Tangible net asset value per 28.04 21.50 (23.32)
share (cents)
Weighted average number of 97 246 109 428 12.53
shares in issue (000`s)
Total number of shares in issue 98 353 110 535 12.39
(000`s)
Notes:
1. The amounts in the "Before the Acquisition" column relate to the
annual financial statements of ADAPT IT for the year ended 30 June
2011.
2. The amounts in the "After the Acquisition" column reflect the
financial effects of the Acquisition on ADAPT IT as if it had
occurred on 1 July 2010 for statement of comprehensive income
purposes and on 30 June 2011 for statement of financial position
purposes.
3. The effects on basic earnings per share and headline earnings per
share are calculated based on the assumption that the Acquisition
was effected on 1 July 2010.
4. The effects on net asset value per share and tangible net asset
value per share are calculated based on the assumption that the
Acquisition was effected as at 30 June 2011.
4. CLASSIFICATION OF THE ACQUISITION
The Acquisition is classified as a Category 2 transaction in terms of
the Listings Requirements of JSE Limited.
3 January 2012
Sponsor and Corporate Advisor
Merchantec Capital
Transactional Attorneys for ADAPT IT
Shepstone and Wylie
Date: 03/01/2012 14:56:01 Supplied by www.sharenet.co.za
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