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DISPOSAL OF THE ENTIRE ISSUED SHARE CAPITAL OF PRESCIENT ASSET MANAGEMENT HOLDINGS (IRELAND)
Prescient Limited
Incorporated in the Republic of South Africa
Registration number: 1936/008278/06
Share Code: PCT ISIN: ZAE000163531
("Prescient" or "the Company")
DISPOSAL BY PRESCIENT OF THE ENTIRE ISSUED SHARE CAPITAL OF PRESCIENT ASSET
MANAGEMENT HOLDINGS (IRELAND) (“PRESCIENT IRELAND”) AND THE WITHDRAWAL OF
CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are advised that Prescient has entered into an agreement (‘the agreement’) to dispose
of the entire issued share capital of Prescient Asset Management Holdings (Ireland) to J&E Davy
(“Davy”) ("the transaction").
2. BUSINESS OF PRESCIENT IRELAND
Prescient Ireland is an investment holding company domiciled in Dublin, Ireland, housing a registered
investment manager, Prescient Investment Managers, and a unit trust company, Prescient Fund
Managers. Prescient Ireland was purchased by Prescient from AIB plc (“AIB”) in May 2012. The
company currently manages assets on behalf of private, charity, corporate, not-for-profit and pension
clients.
3. RATIONALE FOR THE TRANSACTION
There have been three elements to Prescient’s endeavours in Ireland. Initially, after receiving approval
as an investment manager and distributor in Ireland, it launched a collective investment scheme to
manage the exposure of South African clients in international markets.
Secondly, Prescient founded Stadia Fund Management, which is approved to undertake the
administration of regulated funds in Ireland. The third route was the purchase of a fully-fledged asset
management business with a full staff compliment and existing assets. This model has proved a less
comfortable fit and, on receiving Davy’s offer, Prescient decided to sell the asset management
operation.
4. EFFECTIVE DATE
The effective date of the transaction is the third Business Day following the completion of the
conditions precedent.
5. CONDITIONS PRECEDENT
The transaction is subject, inter alia, to the following conditions precedent:
- the granting of all regulatory approvals or clearances as may be required, including that of the
Central Bank of Ireland;
6. SETTLEMENT OF THE TRANSACTION
The transaction will be settled in the following manner:
1. The initial consideration:
- €2.9m on the effective date; and
- A Euro for Euro payment in respect of the cash held by Prescient Fund Managers for
regulatory purposes. This is an amount of €125,000. This will also be settled on the
effective date
(collectively ‘the Initial Consideration”)
2. The deferred consideration
The deferred consideration is based on the revenue earned from existing Prescient Ireland
pension fund clients (“Pension Clients”) for the five years following completion. A payment will
be made at the end of each year based on the quantum of revenue from Pension clients. The
amount of the payment will be calculated as follows:
- For revenue from Pension Clients less than €800,000 per annum – 0% of revenue
- For revenue from Pension Clients greater than €800,000 per annum and less than
€1,000,000 per annum – 50% of revenue
- For revenue from Pension Clients greater than €1,000,000 per annum and less than
€2,100,000 per annum – 70% of revenue
- For revenue from Pension Clients greater than €2,100,000 per annum – 80% of
revenue
In terms of the transaction agreements with AIB relating to the acquisition of Prescient Ireland by
Prescient from AIB in May 2012, should Prescient enter into any agreement to dispose of Prescient
Ireland before 30 November 2013, the maximum proceeds receivable by Prescient may be no more
than the total paid by Prescient to AIB. Therefore the maximum receivable by Prescient in terms of
the transaction is €6,223,921 (“the maximum disposal consideration”)
7. FINANCIAL EFFECTS OF THE TRANSACTION ON PRESCIENT FOR THE 12 MONTHS ENDED 31
MARCH 2013
The unaudited pro forma financial effects of Prescient before and after the transaction are based on
the final published audited results of Prescient for the 12 months ended 31 March 2013. The financial
effects are presented for illustrative purposes only, to provide information on how the transaction may
have impacted on the results and the financial position of Prescient. The unaudited pro forma effects
are the responsibility of Prescient’s directors. Due to the nature of the unaudited pro forma financial
effects, they may not fairly present Prescient’s financial position and the results of its operations after
the acquisition. It has been assumed for the purpose of the financial effects that the agreement took
place with effect from 1 April 2012. The financial effects do not purport to be indicative of what the
financial results would have been, had the transaction been implemented on a different date. The
unaudited pro forma financial information has been presented in a manner consistent in all respects
with International Financial Reporting Standards and Prescient’s accounting policies applied
consistently throughout the period.
Before the After the %
transaction transaction Change
Earnings per share (“EPS”) (cents) 7.34 7.45 1.58
Headline earnings per share (“HEPS”) (cents) 7.51 7.62 1.54
Net asset value per share (“NAV”) (cents) 0.47 0.42 -10.52
Tangible net asset value (“TNAV”) (cents) 0.17 0.15 -11.00
Shares in issue (000’s) 1 576 346 1 576 346
Weighted average number of shares in issue (000’s) 1 396 375 1 396 375
Notes:
1. The EPS and HEPS in the “Before the transaction” column of the table are based on the
audited statement of comprehensive income of Prescient for the period ended 31 March
2013; and 1 396 375 360 shares in issue (being the weighted number of ordinary shares in
issue for the period ended 31 March 2013).
2. The EPS and HEPS in the “After the transaction” column of the table are based on 1 396
375 360 shares in issue and the assumptions that:
- the transaction became effective on 1 April 2012 and the Initial Consideration was
settled on that date;
- transaction costs relating to the transaction are estimated to be R2,000,000;
- the Initial Consideration was settled in cash, and based on a ZAR:Euro exchange
rate of 13.71; and
- the cash received would have been applied against interest bearing debt, reducing
interest paid thereon at an after tax interest rate of 5.93%, yielding an after tax
interest saving of R2 458 405.
3. The NAV per share and TNAV per share in the “Before the transaction” column of the table
are based on the audited statement of financial position of Prescient at 31 March 2013 and
1 576 346 232 shares in issue.
4. The NAV per share and TNAV per share in the “After the transaction” column of the table
are based on the assumptions that:
- the transaction was completed on 31 March 2013;
- the Initial Consideration was settled entirely in cash, based on a ZAR:Euro
exchange rate of 13.71; and
- transaction costs relating to the transaction are estimated to be R2,000,000;
5. The pro forma financial effects have not been reviewed by Prescient’s auditors.
8. APPLICATION OF THE TRANSACTION PROCEEDS
Proceeds received from the transaction will be utilised by Prescient to reduce interest bearing debt
incurred when acquiring Prescient Ireland.
9. TRANSACTION CLASSIFICATION
The transaction is classified as a category 2 transaction in terms of the JSE Limited Listings
Requirements.
10. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are no longer required to exercise caution when dealing in their Prescient shares and
accordingly, the cautionary announcement released by Prescient on 15 November 2013 is hereby
withdrawn.
11. RELEASE OF THE UNAUDITED INTERIM RESULTS
The interim results for the six months ended 30 September 2013 will be released on or about 28
November 2013 including further details relating to the transaction.
Cape Town
18 November 2013
Sponsor: Bridge Capital Advisors (Pty) Limited
Date: 18/11/2013 08:58:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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