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Acquisition of Nokusa Engineering Informatics and cautionary annuncement
DATACENTRIX HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1998/006413/06)
Share code: DCT ISIN: ZAE000016051
(“Datacentrix” or “the Company”)
ACQUISITION OF NOKUSA ENGINEERING INFORMATICS PROPRIETARY LIMITED (“NOKUSA
ENGINEERING INFORMATICS”) AND CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
The board of directors of Datacentrix (“the Board”) is pleased to advise shareholders that Datacentrix
has, through its wholly-owned subsidiary, Datacentrix Proprietary Limited, entered into agreement with
Nokusa Investments Proprietary Limited (“Nokusa Investments”), Robert George Murray Cells (“Cells”),
Gerhard Hielco Du Plessis (“Du Plessis”), Barend Frederik Kotze (“Kotze”), Michelle Momberg
(“Momberg”) and Abraham Carel Marthinus Spies (“Spies”) (collectively referred to herein as the
“Sellers”), to acquire 100% of the issued share capital of Nokusa Engineering Informatics from the
Sellers - who have agreed to dispose of their individual shareholdings of 27%, 12.4%, 12.4%, 4.8%,
12.4% and 31% respectively, as one indivisible transaction - for a total purchase consideration of R45.75
million (“the Acquisition”).
2. THE ACQUISITION
2.1 Nature of the Nokusa Engineering Informatics business
Nokusa Engineering Informatics is a well-established and leading consulting company, specialising
in Enterprise Content Management (“ECM”) strategies, solutions and implementations. The company
is a South African based, privately owned black-empowered company that operates throughout
South Africa and has done work globally. Nokusa Engineering Informatics is part of an extensive
ECM partner network including SAP, OpenText, AIIM, Cideon Software, Collaborit and Pitney
Bowes.
Nokusa Engineering Informatics consults to a number of blue-chip clients and provides strategies
that are product-independent for their document and record, management and lifecycle, focusing
exclusively on ECM. The company is the only SAP ECM Partner in Africa and has received
numerous awards from SAP for service excellence. Nokusa Engineering Informatics has since 2006
also been an accredited training provider for the ECM Certificate Education Programme of AIIM (the
ECM Association) and has the largest number of certified AIIM Masters in Southern Africa.
Founded in 1997 as a specialist consultancy in the implementation of SAP ECM technologies,
Nokusa Engineering Informatics is based in Johannesburg
2.2 The rationale for the Acquisition
Datacentrix is regarded in the IT industry as being one of the market leaders in the ECM sector.
Aligned with its current strategy, Datacentrix wishes to consolidate and strengthen this position by
acquiring the knowledge and expertise that is inherent to the business of Nokusa Engineering
Informatics.
Datacentrix’ main competitors are aggressively targeting the growing opportunities in the ECM sector
and equally aggressively embarked on acquiring targeted ECM skillsets. These competitors all
acknowledge the opportunities in the ECM sector versus the enormous scarcity of professionally
qualified skilled individuals in the same sector. By acquiring a pool of highly skilled ECM individuals,
Datacentrix can immediately complement its ECM operations. Furthermore, by acquiring Nokusa
Engineering Informatics, Datacentrix will strengthen its position in the same sector, stamping its
authority in the ECM environment. Datacentrix will also benefit substantially by leveraging Nokusa
Engineering Informatics’ skillsets across the rest of the Datacentrix business.
2.3 Purchase consideration
The total purchase consideration of R45.75 million for the Acquisition – which is subject to the
achievement of an audited net profit after tax of R6.6 million for the year ending 28 February 2013
(“the Profit Warranty”), failing which the Purchase Price shall be reduced by an amount calculated by
multiplying the shortfall in the Profit Warranty by 6.82 - is to be settled by Datacentrix from existing
cash resources, as follows:
- 90% of the Purchase Price, being R41.175 million is payable in cash by electronic fund transfer
within 10 business days of the closing date, being 28 February 2013; and
- 10% of the Purchase Price, being R4.575 million is to be held in escrow and held as security for
any shortfall deduction and/or the breach of any of the warranties, including the Profit Warranty,
and such amount and interest will be paid on 3 December 2013.
The Sellers have provided warranties which are normal in this type of transaction.
2.4 Conditions precedent and effective date
The Acquisition is conditional upon the fulfilment (or waiver, as the case may be) of the following by
no later than 15 February 2013:
2.4.1. the execution in favour of Nokusa Engineering Informatics and Datacentrix, of a restraint of
trade agreement by each of the Sellers;
2.4.2. key staff of Nokusa Engineering Informatics entering into amended contracts of employment
with Nokusa Engineering Informatics for a period ending no earlier than 29 February 2016;
2.4.3. all loans by the Sellers, or by any third party related to the Sellers, to Nokusa Engineering
Informatics being repaid by Nokusa Engineering Informatics;
2.4.4. the Sellers obtaining written confirmation from third parties to agreements which Nokusa
Engineering Informatics is party to, to the effect that such third parties will not terminate their
relationships with Nokusa Engineering Informatics as a result of the change in the control of
Nokusa Engineering Informatics;
2.4.5. the completion of a commercial due diligence on Nokusa Engineering Informatics and the
results thereof being to the satisfaction of Datacentrix;
2.4.6. the completion of the sale of the Engineering Informatics Shares (being the shares in
Engineering Informatics Proprietary Limited (“Engineering Informatics”), a private company
and a subsidiary of Nokusa Engineering Informatics) owned and held by Nokusa
Engineering Informatics, representing 75% of the issued share capital of Engineering
Informatics; and
2.4.7. the approval of the Acquisition by the Board.
The effective date of the Acquisition is 3 December 2012.
2.5 Memorandum of Incorporation
As Nokusa Engineering Informatics will become a subsidiary of Datacentrix following the Acquisition,
Datacentrix will adhere to the provisions of paragraph 10.21 of Schedule 10 of the Listings
Requirements of JSE Limited (“JSE”).
3. PRO FORMA FINANCIAL EFFECTS
The pro forma financial effects of the Acquisition on the reported financial information of Datacentrix are
in the process of being finalised and will be announced to shareholders in due course.
4. CLASSIFICATION OF THE ACQUISITION
The Acquisition is classified as a Category 2 transaction in terms of the Listings Requirements of the
JSE and does not require shareholder approval.
5. CAUTIONARY ANNOUNCEMENT
Further to paragraph 3 above, shareholders are advised to exercise caution when dealing in Datacentrix
securities until a further announcement, incorporating the pro forma financial effects of the Acquisition, is
made.
14 December 2012
Sponsor and Corporate Adviser to Datacentrix
Merchantec Capital
Corporate Adviser to Nokusa Engineering Informatics
i capital advisers Proprietary Limited
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