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Abridged Revised Listing Particulars, Posting of Circular and Notice of General Meeting
M&S Holdings Limited
Incorporated in the Republic of South Africa
(Registration Number 2006/011359/06)
Share Code: MSA
ISIN: ZAE000165411
(“M&S” or “the Company”)
ABRIDGED REVISED LISTING PARTICULARS, POSTING OF CIRCULAR AND
NOTICE OF GENERAL MEETING
1. INTRODUCTION
1.1 Shareholders of M&S (“M&S Shareholders”) are referred to the
detailed terms announcement released by the Company on
2 October 2013 (“the Terms Announcement”) wherein M&S
Shareholders were advised that the Company had entered into
agreements to acquire (i) BDM Holdings Proprietary Limited
(“BDM Holdings”) and the minority interests held by certain
minority interest shareholders in the subsidiaries of BDM
Holdings and (ii) BDM Plant Hire & Mining CC (“BDM Namibia”)
(together referred to as “the BDM Group”), following the
conversion of BDM Namibia from a closed corporation into a
private company (together referred to as “the Acquisitions”).
1.2 M&S Shareholders were further advised that M&S has entered
into an agreement whereby M&S intends to issue share options
at a strike price of 84 cents per share, subject to the
approval and successful implementation of the Acquisitions,
to the relevant participants and on the terms set out in the
Terms Announcement (“Share Option Issue”).
1.3 The full particulars of the Acquisitions and the Share Option
Issue, incorporating revised listing particulars are
contained in a circular that has been posted to shareholders
today, 28 October 2013 (“the Circular”).
1.4 As a result of the aforementioned, the abridged revised
listing particulars of M&S are presented in this
announcement. These abridged revised listing particulars are
not an invitation to the public to subscribe for securities,
but are issued in compliance with the JSE Listings
Requirements for the purpose of providing information to the
public and investors with regard to M&S, post the successful
implementation of the Acquisitions.
1.5 The information included in this abridged revised listing
particulars has been extracted from the revised listing
particulars contained in Annexure 7 to the Circular.
1.6 For a full appreciation of the Acquisition, M&S Shareholders
are advised to read the Circular together with the revised
listing particulars in their entirety.
2. PURPOSE OF THE ABRIDGED REVISED LISTING PARTICULARS
2.1 The purpose of these abridged revised listing particulars
are to, inter alia:
2.1.1 provide M&S Shareholders with the relevant
information regarding the business of M&S post the
successful implementation of the Acquisitions; and
2.1.2 provide M&S Shareholders with information on the
strategy and vision of M&S, post the successful
implementation of the Acquisitions.
3. BRIEF OVERVIEW AND BUSINESS OF M&S
3.1 History
The M&S group of companies (“M&S Group”) was established in
1992, primarily as a personnel outsourcing company and
expanded into safety surveillance and scaffolding during the
1990’s. The scaffolding division was subsequently sold in
March 2012. M&S is currently listed on the JSE’s AltX Board
in its “Support Services” sector.
3.2 Business
3.2.1 The M&S Group operates chiefly as a provider of
outsourced personnel and safety surveillance
equipment, primarily to chemical and petro-chemical
plants as well as industrial sectors associated with
energy generation and coal mines.
3.2.2 M&S has two wholly-owned operating subsidiaries,
namely Safety Adherence Technology Proprietary
Limited t/a S.A.T. (“S.A.T.”) and M&S Projects
Proprietary Limited (“M&S Projects”). In addition,
M&S Projects holds interests in various personnel
outsourcing, recruitment and property holding
companies.
3.2.3 S.A.T. was established in 1999 to develop an
invention to better enable its clients to adhere to
the provisions and requirements of the Occupational
Health and Safety Act (“OHSA”). The result was a
digital, interactive electronic safety surveillance
and record-keeping system that operates from a single
control room per area. Through a combination of
strategically placed scanners and cameras, radio
contact, gas monitoring and roving technicians, the
system does all the visual recording as well as
reporting on all confined space entries and exits
ensuring not only compliance with the provisions of
the OHSA but also the safety of its clients’
employees.
3.2.4 M&S Projects was established in 1992 and specialises
in personnel outsourcing in the energy sectors, the
chemical- and petro-chemical industries, power
generation and maintenance of underground mining
equipment, although it also outsources personnel to,
inter alia, the mining- and transport industry and
safety-related personnel. The spectrum of craft
categories range from managers, supervisors, foremen,
highly qualified artisans, technicians, operators of
heavy mining and construction equipment and personnel
with computer and IT experience.
3.2.5 Further details relating to the M&S’s subsidiaries
are set out in Appendix 8 to Annexure 7 of the
Circular.
4. BRIEF OVERVIEW AND BUSINESS OF THE BDM GROUP
4.1 History
4.1.1 The BDM Group was founded pursuant to a strategic
merger and integration of various businesses.
4.1.2 The BDM Group’s strategy is to be invested in
businesses covering a full range of services that
complement each other and provide a one-stop non-core
outsourcing group with a national footprint.
4.2 Business
4.2.1 The BDM Group provides outsourced personnel services,
industrial and mining services and contract catering
and food services to an array of clients including
mines, industrial businesses, manufacturing
businesses, transport businesses, retail outlets,
hospitals and schools.
4.2.2 For many companies, their non-core divisions
constitute an overhead expense and the ability to
outsource this function results not only in a
reduction in costs but also a reduced burden on
management. Extensive experience in their industry
enables the BDM Group to add value to areas of
business that, although vital to optimal business
growth and performance, are often neglected. In this
way, the BDM Group liberates its clients to focus on
their core business functions.
4.2.3 For further particulars relating to the services
provided by the BDM Group and the activities of the
various companies within the BDM Group, M&S
Shareholders are referred to paragraph 3 of
Annexure 7 to the Circular.
5. BRIEF OVERVIEW OF THE COMBINED GROUP
5.1 It is envisioned that the Acquisitions will result in a more
substantial business able to facilitate the accelerated
growth of the combined group going forward. Synergies
expected to be captured include cross-selling of services to
a larger client base, leveraging expertise across the
combined group and capitalising on potential cost synergies.
Combined knowledge and experience, coupled with a broader
client base, creates opportunities to deliver new contracting
services which would not otherwise be possible.
5.2 A combined group structure, should the Acquisitions be
approved, is depicted in paragraph 4 of Annexure 7 to the
Circular.
6. PROSPECTS
6.1 The directors of M&S are of the view that the diversified
contracting services of the combined group will give rise to
a number of novel ventures that will be actively pursued,
such as:
6.1.1 new clients in manufacturing and retail industries;
6.1.2 food distribution and catering at capital projects in
the energy sector;
6.1.3 expansion of mining activities;
6.1.4 acquisition of a training division; and
6.1.5 expansion of plant maintenance services.
7. DIRECTORS
7.1 The full names, ages, business addresses and capacities of
the proposed directors (all of whom are South African
citizens) after successful implementation of the Acquisitions
are outlined below. M&S Shareholders are referred to Appendix
3 of Annexure 7 to the Circular for additional information
regarding the proposed directors of M&S, after the successful
implementation of the Acquisitions.
Full name Age Capacity Business Address
Petrus Johannes 51 Chief Duncan Manor Suite
Jacobus Dry Executive 5, 150 Brooks
Director Street, Brooklyn
Jacobus Gerrit 50 Chief Erasmus Forum C, 434
Nieuwoudt Operating Rigel Avenue South,
Officer Erasmusrand, 0181
Nicolaas Godfried 49 Executive Duncan Manor Suite
Thiart Director 5, 150 Brooks
Street, Brooklyn
Bulelani Thandabantu 59 Non-executive 21 Impala Road,
Ngcuka Chairperson Chiselhurston,
Sandton, 2196
Sarah Liezel Grobler 40 Acting 6 Topaz Avenue,
Financial Lyttelton Manor,
Director Ext 3, Centurion,
0157
Pieter Nicolaas de 37 Non-executive 1st Floor, Ou
Waal Director Kollege Building, 35
Kerk Street,
Stellenbosch, 7600
Johan Jacobus 65 Lead Christina de Wit
Senekal Independent Street, De Meule,
Non-executive Prince Albert, 6930
Director
Nona Ndiliseka 47 Independent 23 Impala Road,
Sonjani Non-executive Building B,
Director Chiselhurston,
Sandton, 2196
7.2 Although FF Goosen, the current Chief Executive Officer of
M&S, will remain a member of the executive management team
and as a director of M&S Projects following the successful
implementation of the Acquisitions, he will no longer
continue to be a member of the board of M&S.
8. CAPITAL STRUCTURE
8.1 Following the implementation of the Acquisitions, the
authorised capital of the Company will consist of 500 000 000
ordinary shares with no par value and the issued share
capital of the Company will consist of 387 954 544 ordinary
shares with no par value. The total value of the Company’s
issued share capital will be R312 million.
8.2 The rights attaching to each of the shares in M&S are set out
in Appendix 2 of Annexure 7 to the Circular which rights
include, inter alia, preferential conversion and/or exchange
rights, voting rights, variation of rights, redemption
rights, conversion of rights and preferential entitlements to
distributions in the ordinary course and on winding up for
Shareholders.
9. PRO FORMA FINANCIAL EFFECTS
The pro forma financial effects set out below are to replace
the pro forma financial effects included in the Terms
Announcement. The pro forma financial effects of the
Acquisitions and the Share Option Issue, as set out below,
are the responsibility of the directors of M&S. The pro
forma financial effects are presented in a manner consistent
with the basis on which the historical financial information
has been prepared and in terms of M&S’s accounting policies.
The pro forma financial effects have been presented for
illustrative purposes only and, because of their nature, may
not give a fair reflection of M&S’s financial position post
the implementation of the Acquisitions and the Share Option
Issue.
The table below sets out the pro forma financial effects of
the Acquisitions and the Share Option Issue on M&S, based on
the reviewed financial results for the financial year ended
30 June 2013.
Reviewed Pro forma Change (%)
results before results after
the the
Acquisitions Acquisitions
and the Share and the Share
Option Issue Option Issue
Basic earnings
per share
(cents) 17.0 15.6 (8.2)
Headline
earnings per
share (cents) 16.2 15.2 (6.1)
Net asset value
per share
(cents) 41.2 53.3 29.4
Net tangible
asset value per
share (cents) 32.2 28.1 (12.7)
Weighted
average number
of shares in
issue (‘000) 155 182 387 954 150.0
Number of
shares in issue
(‘000) 155 182 387 954 150.0
The decrease in earnings and headline earnings per share is
due to the fact that the effects of the transaction, which
include transaction costs and amortisation of intangible
assets recognised, are included in the pro forma results
after the transactions. The detailed notes and assumptions to
the pro forma’s set out above are set out in Annexure 1 to
the Circular.
10. INTENDED CHANGE OF NAME
10.1 Should the Acquisitions be implemented, it is intended that
the name of the Company will change to CSG Holdings Limited,
which acronym stands for Contract Services Group (“Change of
Name”).
10.2 The rationale for the proposed Change of Name is to better
reflect the combined underlying businesses of M&S and the BDM
Group going forward, after the implementation of the
Acquisitions.
10.3 If approved by M&S shareholders, it is intended to change the
name of M&S to CSG Holdings Limited as soon as reasonably
possible thereafter.
11. POSTING OF THE CIRCULAR, NOTICE OF GENERAL MEETING AND
SALIENT DATES AND TIMES
11.1 The Company has posted the Circular, dated Monday,
28 October 2013, to its shareholders relating to the
Acquisitions, the Share Option Issue, the Change of Name and
incorporating revised listing particulars. A copy of the
Circular is also available on M&S’s website
(www.msholdings.co.za).
11.2 The general meeting, convened in terms of the notice
incorporated in the Circular, will be held at Protea Hotel,
Midrand, situated at 14th Street, Noordwyk, Ext. 20 Halfway
House, Midrand, Gauteng, South Africa, 1685 on Wednesday, 27
November 2013, commencing at 10h00 (“the General Meeting”)
for purposes of considering and, if deeming fit, passing with
or without modification, the resolutions required to give
effect to the Acquisitions, the Share Option Issue and the
Change of Name.
11.3 The salient dates and times are as follows:
2013
Circular containing revised listing
particulars, notice of General Meeting,
form of proxy and form of surrender
posted to shareholders on Monday, 28 October
Last day to trade in order to be
eligible to vote at the General Meeting Friday, 15 November
Record date to be eligible to vote at
the General Meeting Friday, 22 November
Last day to lodge forms of proxies in
respect of the General Meeting by 10h00
on Monday, 25 November
General Meeting of M&S shareholders to
be held at 10h00 on Wednesday, 27 November
Results of the General Meeting released Wednesday, 27 November
on SENS on
2014
Anticipated date of issue by CIPC of
the amended registration certificate
reflecting the Change of Name on or Thursday, 16 January
before
Finalisation announcement for the
Change of Name published on SENS Friday, 17 January
Last day to trade under the old name of
M&S Holdings Limited Friday, 24 January
Shares trade under the new name of CSG
Holdings Limited, JSE Code CSG, ISIN
ZAE000184438 and abbreviated name CSG
from the commencement of trading on Monday, 27 January
Record date for the Change of Name Friday, 31 January
Issue of replacement share certificates
and posting thereof to those holders of
certificated shares who have submitted
their share certificates and forms of
surrender on or before 12h00 on the
record date for the Change of Name and
updating CSDP and broker accounts on
behalf of holders of dematerialised Monday, 3 February
shares
Note
(1) The above dates and times are subject to amendment. To
the extent that the CIPC issues the amended registration
certificate reflecting the Change of Name after Thursday,
16 January 2014, the above dates and times will be
adjusted accordingly. Any such amendment will be released
on SENS.
(2) Share certificates in the name of M&S Holdings Limited
may not be dematerialised or rematerialised after Friday,
24 January 2013.
(3) If Certificated Shareholders have not yet surrendered
their share certificates on or before 12h00 on the record
date for the Change of Name, their replacement share
certificates will be posted to them within 5 (five)
Business Days of such surrender.
(4) Dematerialised shareholders, other than those with “own
name” registration, must inform their CSDP or broker of
their intention to attend the General Meeting in order
for such CSDP or broker to be able to issue them with the
necessary letters of representation to enable them to
attend such meeting. Alternatively, should they not wish
to attend the General Meeting, they should provide their
CSDP or broker with their voting instructions. This must
be effected in terms of the agreement entered into
between the Shareholder and the CSDP or broker.
Centurion
28 October 2013
Transaction and corporate adviser: PSG Capital
Tax adviser: Grayston Elliot
Legal adviser: Martin Raubenheimer
Independent reporting accountant to M&S: Grant Thornton(Johannesburg)
Independent reporting accountant to the BDM Group: PwC
Independent designated adviser: Questco
Date: 28/10/2013 03:38:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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