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Acquisition of Build Kwik and cautionary announcement
ALERT STEEL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2003/005144/06)
JSE code: AET ISIN: ZAE000092847
(“Alert Steel” or “the Company”)
Acquisition of Build Kwik and cautionary announcement
1. INTRODUCTION
Shareholders are advised that Alert Steel (Pty) Ltd (“the purchaser”), a wholly owned subsidiary of Alert
Steel, has entered into an Agreement to purchase the business including certain specified assets and
liabilities as defined in the Agreement, of Build Kwik Wholesalers (Pty) Ltd (“Build Kwik”) as a going
concern, (“the acquisition”) from Kwik Property Holdings (Pty) Ltd (“the seller”), subject to certain
suspensive conditions.
2. RATIONALE FOR THE ACQUISITION OF BUILD KWIK
The integration of building materials, hardware and steel products in a single store provides customers with
a one stop shop solution, which will increase customer numbers per store. The acquisition of Build Kwik will
significantly increase Alert Steel’s turnover as well as provide a greater national footprint in the market.
The merging of the businesses will provide a management and supply chain benefit that will enhance the
profitability of the group.
3. DESCRIPTION OF BUILD KWIK
Build Kwik is a retailer and wholesaler of hardware and building materials.
4. TERMS AND CONDITIONS OF THE ACQUISITION
4.1. On 5 August 2013 Alert Steel (Pty) Ltd signed the Agreement with the seller in respect of the acquisition.
4.2. The total purchase price is R 58 138 809, payable as follows:
4.2.1. R8 138 809 is payable on the completion date, being one day after all suspensive conditions
have been fulfilled (“completion date”),
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4.2.2. R5 000 000 is payable on 15 day of the month following the month after the completion date,
4.2.3. R5 000 000 is payable on the last day of the month following the month after the completion
date,
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4.2.4. R5 000 000 is payable on 15 day of the month following the second month after the
completion date,
4.2.5. R5 000 000 is payable on the last day of the month following the second month after the
completion date,
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4.2.6. R5 000 000 is payable on 15 day of the month following the third month after the completion
date,
4.2.7. R5 000 000 is payable on the last day of the month following the third month after the
completion date,
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4.2.8. R5 000 000 is payable on 15 day of the month following the forth month after the completion
date,
4.2.9. R5 000 000 is payable on the last day of the month following the forth month after the
completion date,
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4.2.10. R5 000 000 is payable on 15 day of the month following the fifth month after the completion
date,
4.2.11. R5 000 000 is payable on the last day of the month following the fifth month after the
completion date.
4.3. The purchase price will be paid out of current working capital resources.
4.4. The transaction is conditional upon inter alia:
4.4.1. The seller obtaining and passing a special resolution of its shareholders as envisaged by section
112 and 115 of the Companies Act 71 of 2008, authorising the disposal;
4.4.2. The purchaser obtaining all the necessary approvals, including Competition Commission approval
that might be required;
4.4.3. The seller procuring leases in respect of the Business Sites as defined in the Agreement; and
4.4.4. The purchaser procuring that Cannistraro Investments 282 (Pty) Ltd, signs surety for and in
favour of the seller for due fulfilment of the obligation of the seller under the Agreement, within 30
days of signature date.
4.5. The purchase price is subject to possible adjustment, depending on the outcome of a stock take on the
completion date.
4.6. The acquisition is subject to warranties that are customary in transaction of this nature.
4.7. The seller will be subject to a restraint of trade.
4.8. The acquisition will be advertised in terms of the Insolvency Act, 1936.
4.9. The purchaser is entitled to a limited due diligence investigation.
5. UNAUDITED PRO FORMA FINANCIAL EFFECTS OF THE ACQUISITION
The unaudited pro forma financial effects of the acquisition will be published in due course.
6. CATEGORISATION OF THE ACQUISITION
The acquisition is categorised, in terms of the JSE Listings Requirements, as a Category 1 transaction
resulting in a Reverse take-over as the size of the acquisition is greater than 100% of the market
capitalisation of Alert Steel and requires shareholders’ approval. A circular including Revised Listing
Particulars will be mailed to shareholders in due course.
7. CAUTIONARY ANNOUNCEMENT
Shareholders are advised to continue exercising caution in dealing in the company’s securities on the JSE
until such time as the financial effects of the acquisition are published.
5 August 2013
Johannesburg
Designated Advisor
Exchange Sponsors
Date: 05/08/2013 01:04:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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