Wrap Text
DTC - Datatec Limited - Datatec Limited acquires full ownership of the African
Businesses in Westcon Group
Datatec Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1994/005004/06)
ISIN: ZAE000017745
Share Code: DTC
DATATEC LIMITED ACQUIRES FULL OWNERSHIP OF THE AFRICAN BUSINESSES IN WESTCON
GROUP
Datatec Limited, "Datatec" or the "Group", (JSE and AIM: DTC), the international
Information and Communications Technology (ICT) group, announces that its 100%
subsidiary, Westcon Group, Inc. has acquired the 33.1% interest in its African
subsidiaries (excluding Westcon South Africa) collectively "Westcon Africa"
which it did not already own ("the Transaction"). This transaction does not
apply to Westcon SA (Pty) Ltd which remains owned 74% by Datatec and 26% by its
BEE* partner, the Mineworkers Investment Corporation.
The Transaction
The rationale for the Transaction is to achieve full ownership of the African
businesses in the Westcon Group.
The Transaction has been effected by agreement with the two minority partners in
Westcon Africa:
International Technology Distributors F.Z. Co Ltd (15.9 % share of Westcon
Africa) - $2.45 million to be settled by the issue of Datatec shares and a
deferred cash payment based on 15.9% of half of the increase in value of Westcon
Africa from 31 August 2011 to 28 February 2013.
Mr & Mrs Paul Moser (17.2% share of Westcon Africa) - $2.65 million to be
settled by the issue of Datatec shares and a deferred cash payment based on
17.2% of half of the increase in value of Westcon Africa from 31 August 2011 to
28 February 2013.
Datatec`s equity ownership of Westcon Africa will increase to 100% on 23 May
2012, the effective date of the Transaction. At the same time the vendors have
renounced put options they previously held in relation to their shareholding.
This will result in the annual fair value adjustments associated with this put
option liability falling away.
The total additional consideration referred to above which is payable based on
half the increase in valuation of the vendors` share of the Westcon Africa
businesses from 31 August 2011 to 28 February 2013 is estimated to be $1.5
million based on an extrapolation of the growth of the business to date.
Issue of shares
900,142 ordinary Datatec ZAR0.01 shares are to be issued and listed pursuant to
the Transaction. Application has been made to the London Stock Exchange for the
admission of these shares to the Alternative Investment Market, and to the JSE
Limited ("JSE") for the listing of these shares. Listing on both exchanges is
expected to become effective on or about 23 May 2012.
Small related party transaction per the Listings Requirements of the JSE
The minority shareholders of the two intermediate holding companies which
constitute Westcon Africa, shown above, were directors, or associates of
directors, of companies in the Westcon Africa group within the past twelve
months and therefore related parties to Datatec. The Listings Requirements of
the JSE require written confirmation from an independent professional expert
confirming that the Transaction is fair to Datatec`s shareholders. BDO Corporate
Finance (Pty) Ltd, as the independent professional expert acceptable to the JSE,
has confirmed that the Transaction is fair and their fairness opinion is
available for inspection at Datatec`s registered office until 30 June 2012.
In addition, in relation to the Transaction, the pro forma financial effects on
Datatec`s earnings per share, headline earnings per share, net asset value
("NAV") per share and net tangible asset value ("NTAV") per share for the period
ended 29 February 2012 have been assessed and are set out in the following
table.
The adverse impact on EPS, HEPS and diluted EPS shown in the financial effects
table below is as a result of fair value mark-to-market adjustments to the put
option liability immediately before the change in ownership. This, by
definition, is excluded from underlying EPS.
The unaudited pro forma financial effects are the responsibility of the Datatec
directors and have been prepared for illustrative purposes only to provide
information about how the Transaction may impact shareholders on the relevant
reporting date and because of its nature may not give a fair reflection of the
Company`s financial position, changes in equity, results of operations or cash
flows after implementation of the Transaction or of the Company`s future
earnings.
(US cents) As Pro- forma % change
reported after
transaction
Earnings per Share 43.5 41.5 -3.6%
Headline Earnings per Share and Diluted 43.1 41.9 -3.6%
Headline Earnings per Share
Diluted Earnings per Share 42.8 41.3 -3.6%
Underlying Earnings per Share and Diluted 47.9 47.9 0.0%
Underlying Earnings per Share
NAV per Share 439 442 +0.8%
NTAV per Share 153 158 +3.1%
The pro-forma earnings per share, headline earnings per share, underlying
earnings per share NAV and NTAV have been prepared on the following assumptions:
Figures as reported are the audited results of Datatec for the year ended 29
February 2012;
There were 187.7 million Datatec shares in issue at 29 February 2012 including
1.2 million contingently issuable shares for which all necessary conditions had
been satisfied at that date;
An interest rate of 2.5% in Europe where the cash element of consideration will
arise was used;
A tax rate of 35% on interest receivable was applied;
The NAV and NTAV pro-forma assumes the Transaction occurred on 29 February 2012,
that the shares were issued and the additional consideration was paid on that
date and that the put option had never existed;
The earnings per share pro-forma assumes the sale proceeds invested and no mark-
to market adjustment relating to the put options in the year ended 29 February
2012 (minor effect on underlying earnings per share as this mark-to market
adjustment is already excluded from underlying earnings).
Small related party transaction per the AIM Rules
The Directors of the Company, having consulted with the Company`s nominated
adviser, Jefferies Hoare Govett consider that the terms of the related party
transaction is fair and reasonable, so far as the shareholders of the Company
are concerned.
* Black Economic Empowerment, a policy and programme of the Government of the
Republic of South Africa to affirm and empower those South Africans or permanent
residents who, on the basis of their race, were previously subjected to adverse
economic, social and other forms of statutorily enforced discriminatory
practices.
Enquiries:
Datatec Limited
(www.datatec.co.za)
Ivan Dittrich - Chief Financial +27 (0) 11 233 1221
Officer
Jefferies Hoare Govett - Nominated Advisor and Broker
Nick Adams/Tom Rider +44 (0) 20 7029 8000
finnCap - Broker
Tom Jenkins / Henrik Persson +44 (0) 20 7220 0500
College Hill
Adrian Duffield/Rozi Morris (UK) +44 (0) 20 7457 2020
Frederic Cornet (SA) +27 (0) 11 447 3030
22 May 2012
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 22/05/2012 17:08:02 Supplied by www.sharenet.co.za
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