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Disposal of Infrasol Proprietary Limiyted
Pinnacle Holdings Limited
Registration number 1986/000334/06
Share Code: PNC
ISIN: ZAE000184149
(“Pinnacle” or “the Group” or “the Company”)
DISPOSAL OF INFRASOL PROPRIETARY LIMITED
INTRODUCTION
The board of directors of Pinnacle (“the Board”) is pleased to advise shareholders that Pinnacle (“the
Seller”) has entered into an agreement (“the Agreement”) with Datacentrix Proprietary Limited, a wholly-
owned subsidiary of Datacentrix Holdings Limited, (“Datacentrix” or “the Purchaser”) to dispose of 100%
of the issued share capital of Pinnacle’s wholly-owned subsidiary, Infrasol Proprietary Limited (“Infrasol”).
The disposal to Datacentrix will include Infrasol’s subsidiary, Merqu Communications Proprietary Limited
(“Merqu”) as one indivisible transaction, for a maximum cash consideration of R85 million, subject to the
conditions precedent set out below (“Disposal”).
NATURE OF INFRASOL BUSINESS
The Infrasol business which consists of Infrasol and Merqu, are design and development businesses with
project management expertise focused on large network infrastructure, data centre design and the
implementation of solution projects that utilise a national footprint of dedicated installers to complete
assignments.
Infrasol has five structured business divisions designed to provide its clients with infrastructure and
services throughout South Africa. These services include:
- Installation and maintenance of LAN and WAN infrastructure;
- Installation and maintenance of building data and switching centres;
- Installation and maintenance of audio-visual solutions;
- Full outsource management of ICT infrastructures (seat management); and
- Installation and maintenance of Fire Detection and Prevention solutions.
Merqu’s services include Network Infrastructure, Building Works, Electrical Reticulation, Backup Power,
Cooling Systems, Fire Detection and Prevention, CCTV, Building Management and Access Control.
RATIONALE
As stated at the release of the unaudited interim results for the six months ended 31 December 2014,
services will remain a core competency of the Group and initiatives to explore the synergies between the
two services organisations within the Group were to be pursued. It was further confirmed that the
investment in Datacentrix would be of a long term nature.
Synergies between Datacentrix and Infrasol and the need to expand the reach and depth of information
technology services offerings have been explored by the respective management teams. A holistic
solution to clients can be provided through the integration of the two divisions. Whilst Infrasol provides
the infrastructure and equipment backdrop, the Datacentrix offerings complete the solution through the
provision of their integrated ICT services and solutions which include managing networks, cloud
computing, monitoring, hosting and ongoing IT services to the client.
The two business models are complementary and the combined operation will be well positioned to
capitalise on new opportunities that will become available through the combined skill set and improved
end to end solution offering.
Any forward looking statements contained in this announcement have not been reviewed nor reported
on by Pinnacle’s auditors.
SALE CONSIDERATION
The total sale consideration of R85 million is to be settled by Datacentrix by way of an electronic fund
transfer from existing cash resources within 9 business days after the last of the conditions precedent
below have been fulfilled or waived, as the case may be.
The Sale consideration shall be an all-inclusive amount between R65 million and R85 million. The final
amount receivable will be determined and fixed by multiplying the audited profit after tax of Infrasol as
at 30 June 2015 by a PE Ratio of 8,5.
With the release of the unaudited interim results for the six months ended 31 December 2014, the
Company advised that, through various actions and initiatives, it would be in a position to reduce gearing
by approximately R250 000 000. The above sale, together with the sale of properties announced on SENS
on 2 April 2015 and 10 April 2015, will realise up to R232 176 480 which will be applied towards the
reduction of gearing.
The consolidated value of net assets of the Infrasol business subject to the acquisition as at 30 June 2014
was R22,896 Million and the profit after tax for the Year to 30 June 2014: R13,444 Million.
CONDITIONS PRECEDENT AND EFFECTIVE DATE
The Disposal is subject to the fulfilment or waiver, as the case may be, of inter alia the following conditions
precedent by no later than 30 September 2015:
. Pinnacle obtaining written confirmation from third parties to contracts to which Infrasol is a party,
consenting to the change in control of Infrasol;
. the shareholders of Datacentrix Holdings Limited, approving the sale; and
. all regulatory approvals being obtained including the Johannesburg Stock Exchange and the
Competition Commission.
The effective date is 1 July 2015.
CATEGORISATION
The Disposal is a Category 2 transaction in terms of the Listings Requirements of the JSE Limited and does
not require Pinnacle shareholder approval.
WARRANTIES AND UNDERTAKING
The Seller has provided warranties that are standard for this type of transaction, together with an
undertaking that, for a period of two years from the effective date, the Seller will not compete with
Infrasol and/or Datacentrix in the Outsourcing and Datacentre Design, Implementation and Facility
Management sectors of the information and communication technology industry.
Midrand
17 April 2015
Sponsor: Deloitte & Touche Sponsor Services Proprietary Limited
Legal Advisor: Tugendhaft Wapnick Banchetti and Partners
Date: 17/04/2015 04:30:00 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
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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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