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Acquisition by Mustek of interest in Sizwe Africa IT Group Proprietary Limited (“Sizwe”)
MUSTEK LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/070161/06)
Share Code: MST
ISIN Code: ZAE 000012373
(“Mustek” or “the company” or “the Group”)
ACQUISITION BY MUSTEK OF INTEREST IN SIZWE AFRICA IT GROUP PROPRIETARY
LIMITED (“SIZWE”)
1. Introduction
Shareholders are advised that Mustek has signed agreements dated 12 December 2013
to acquire an indirect 26% equity interest in Sizwe Africa IT Group Proprietary Limited
(“Sizwe”), a provider of information and communications technology products, network
products and solutions and information technology maintenance and support services
for a total cash consideration of R15 166 666.45 (“purchase price”), with effect from the
effective date, subject to the condition precedent below (“the transaction”). Mustek will
also advance a loan of R6 666 667 to Zaloserve Proprietary Limited (“Zaloserve”), the
ultimate holding company of Sizwe and a loan of R7 966 666.55 to Omni Capital
Proprietary Limited (“Omni”) on the effective date.
The purchase price is not subject to any performance conditions.
The effective date will be the third business day following the day when the condition
precedent shall have been fulfilled or waived (“effective date”).
2. Rationale
The transaction is part of the Group`s drive to broaden its service offering – it would also
deliver access to a larger customer footprint, align us with a partner with a solid track
record and critical mass and improve our Enterprise Development standing.
While striving to offer customers a perfect match for their technology needs, the
acquisition of a stake in Sizwe will enable Mustek to move up the value chain by
strengthening the following areas of its service offering:
. Network Solutions including IT network and infrastructure design and
implementation;
. Infrastructure Solutions including a spectrum of turnkey solutions for facility
management and infrastructure maintenance; and
. a service delivery model that offers a total solution in managing the life cycle of
equipment, fielding skilled technicians countrywide to provide IT and print
solutions and end-user maintenance and support, with immediate service
assured through a 24-hour service desk.
3. Salient terms
Mustek will advance a loan of R7 966 666.55 to Omni, a 100% black-owned company as
part of its enterprise development initiatives. Interest will be charged at prime and the loan is
repayable five years from the effective date. In turn, Omni Capital will subscribe for 35% of
the share capital of Zatophase Proprietary Limited (“Zatophase”) for a total consideration of
R8 166 666.55. Omni’s shares in Zatophase will be pledged as security for the loan from
Mustek. Mustek will subscribe for 65% of Zatophase for a total consideration of
R15 166 666.45. Zatophase will subscribe for 40% of the share capital of Zaloserve, Sizwe’s
ultimate holding company, for a total consideration of R23 333 333.
Mustek’s loan of R6 666 667 to Zaloserve is unsecured, will attract interest at prime and
is repayable on or before 31 December 2018.
4. Condition precedent
The transaction is subject to the necessary regulatory approvals.
5. Pro forma financial effects
The table below sets out the pro forma financial effects of the transaction for the year
ended 30 June 2013. The pro forma financial effects are presented for illustrative
purposes only and because of their nature may not give a fair reflection of the company’s
results of operations, financial position and changes in equity after the transaction.
It has been assumed for purposes of the pro forma financial effects that the transaction
took place with effect from 1 July 2012 for earnings per share and headline earnings per
share purposes and 30 June 2013 for net asset value per share and net tangible asset
value per share purposes.
The directors of the company are responsible for the preparation of the pro forma
financial effects. The accounting policies of Mustek have been applied in calculating the
pro forma financial effects.
The pro forma financial information is prepared in terms of the Listings Requirements of
the JSE and guidelines issued by the South African Institute of Chartered Accountants.
Per ordinary share Notes Before After Change Change
(cents) (cents) (cents) (%)
Earnings 1 78,4 62,9 (15,5) (19,8)
Headline earnings 1 72,9 63,0 (9,8) (13,5)
Net asset value 2 762,1 762,1 - -
Net tangible asset 2 709,1 709,1 - -
value
Weighted number 108 436 464 108 436 464 - -
of shares in issue
Actual number of 108 433 165 108 433 165 - -
shares in issue
Notes:
1. The amounts in the “Before” column represent the audited headline earnings and
earnings per share disclosed in the financial results for the year ended 30 June 2013.
The amounts in the “After” column represent the headline earnings and earnings per
share after the transaction based on the assumption that the transaction was
effective 1 July 2012.
2. The amounts in the “Before” column represent the audited net asset value and net
tangible asset value per share as disclosed in the financial results for the year ended
30 June 2013. The amounts in the “After” column represent the net asset value and
net tangible asset value based on the financial results for the year ended 30 June
2013 adjusted for the transaction, had it been effected on 30 June 2013.
3. The unaudited management accounts for Sizwe for the period 1 September 2012 to
31 August 2013 was used to calculate the financial effects. The Mustek board of
directors is satisfied with the quality of these management accounts.
4. An interest rate of 8,5% has been assumed for purposes of calculating both interest
earned and interest paid. This adjustment is of a continuing nature.
5. Once-off transaction costs are immaterial and have not been taken into account.
6. There are no other post balance sheet events requiring adjustments to the pro forma
financial information.
6. Categorisation
The transaction is classified as a Category 2 transaction in terms of JSE Listings
Requirements and therefore does not require Mustek shareholder approval.
7. Responsibility statement
The Mustek board accepts responsibility for the information contained in this
announcement. To the best of their knowledge and belief, the information contained in
this announcement is true and nothing has been omitted which is likely to affect the
importance of the information included.
Midrand
13 December 2013
Sponsor
Deloitte & Touche Sponsor
Services (Pty) Ltd
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