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Announcement relating to the acquisition of 100% in NFB finance Brokers Gauteng Proprietary Limited
NVEST FINANCIAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2008/015990/06)
(“NVest” or “the Company” or “the Group”)
ISIN Code: ZAE000199865 JSE Code: NVE
ANNOUNCEMENT RELATING TO THE ACQUISITION OF 100% IN NFB FINANCE BROKERS GAUTENG
PROPRIETARY LIMITED (“NFB Gauteng”) AND ASSOCIATED ISSUE OF SHARES FOR CASH, SECTION
122 ANNOUNCEMENT, NOTIFICATION OF RESTRUCTURE OF BOARD OF DIRECTORS OF THE
COMPANY AND WITHDRAWAL OF CAUTIONARY ANNOUNCMENT
Acquisition of NFB Gauteng and associated issue of shares for cash
1) Background
NVest shareholders are advised that NVest has entered into an agreement with the
shareholders of NFB Gauteng in terms of which the Company will acquire 100% of the
shares in NFB Gauteng for a consideration of R62 700 000 (sixty two million seven hundred
thousand rand) to be settled through the issue of 33 000 000 (thirty three million) ordinary
shares at R1.90 per share (“the Acquisition”). The sellers are not related parties to NVest
and comprise the following:
- Crescit Eundo Trust;
- Paul Marais
- Shapiro Family Trust;
- The Grakel Trust;
- The Lawrence Andrew Wiid Family Trust;
- The Michael Estment Family Trust;
- Three One Eight Trust; and
- T L Trust.
2) Description of the business carried on by NFB Gauteng
NFB Gauteng acts as a Financial Services Provider and specialises in providing transparent
and holistic wealth management, advice and solutions. NFB Gauteng has been in
business for 30 years and shares a common asset management platform with the advisory
business of NVest as well as having a long working history with NVest and several of its
subsidiaries. NFB Gauteng has assets under management of approximately R9.0 billion.
3) Effective Date
The effective date for the Acquisition is 1 September 2015.
4) Rationale for the Acquisition
The rationale for the Acquisition is in line with NVest’s stated strategy at the time of listing to
grow the group by way of acquisition and also to extend the group into other regions. The
Acquisition of NFB Gauteng enables the Group to expand into the Gauteng market and
to grow its assets under management. Owing to the long working history between NFB
Gauteng and NVest, it is a natural fit into the NVest Group. The acquisition has been
structured to be accretive to net asset value and headline earnings per share of NVest.
5) Conditions precedent
There are no outstanding conditions precedent other than the issue and listing of the
shares on the JSE, which process has commenced.
6) Categorisation
The Acquisition is classified as a Category 2 transaction in terms of the JSE Listings
Requirements and does not require shareholder approval.
7) Financial information
Per the audited financial statements of NFB Gauteng as at 28 February 2015, the financial
information is as follows:
- The value of the net assets of NFB Gauteng was R5 813 192; and
- The profit after tax attributable to the net assets was R7 526 979.
Subsequent to the year end, there have been no material changes to the above other
than in the ordinary course of business.
8) Memorandum of Incorporation (“MOI”) of NFB Gauteng
Post the Acquisition; NVest will hold a total interest of 100% in NFB Gauteng making NFB
Gauteng a subsidiary of NVest. Accordingly, NVest will ensure that the provisions of the
MOI do not frustrate or relieve the Company in any way from compliance with its
obligations in terms of the JSE Listings Requirements.
9) Appointment to the board of directors
Pursuant to the Acquisition, the board of directors of NVest has approved the
appointment of Mike Estment as an executive director with effect 1 September 2015.
10) Issue for Cash
The Company has also agreed to issue 1 000 000 (one million) new shares at an issue price
of R1.90 (one rand and ninety cents) for the benefit of NFB Gauteng employees, which
issue of shares will be under the general authority to issue shares for cash (“Issue for Cash”).
The Issue for Cash does not in any way form part of the purchase price in respect of the
Acquisition.
The Issue for Cash is under NVest’s general authority to issue shares for cash and the shares
have been issued at a 9.5% discount to the 30 day Volume Weighted Average Price
(“VWAP”) of NVest shares as at 3 July 2015, it being noted that the directors determined
such price as at 3 July 2015 and the discount to the VWAP is in line with the authority
granted to directors at the Annual General Meeting of the Company. The issue of shares
for cash is to public shareholders as defined in the JSE Listing Requirements and the shares
will rank pari passu to the existing shares in issue.
The proceeds from the Issue for Cash will increase the cash reserves of the Group and is
intended to be applied towards the planned growth of NVest by way of acquisition.
Restructure of board of directors of the company
Pursuant to the Acquisition and, after due consideration taking into account the principles of
good corporate governance as embodied in the King III Code of Governance, the directors of
the Company have decided that it would be in the best interests of the Company for the
board composition to be restructured. As such, the number of executive directors on the board
will be reduced in order to attain a 50% representation on the Board by non-executive
directors, with the majority of such non-executive directors being independent. Accordingly,
the resignations of the following Directors have been approved:
- Philip Barry Bartlett
- Robert More McIntyre
- Travis Henry McClure
- Brendan Joseph Connellan
- Gavin Robin Ramsay
The above individuals will remain as directors and employees at a subsidiary level. Brendan
Joseph Connellan will also remain as Company Secretary.
Following the above board restructure, with effect from 1 September 2015, the Board of
Directors of the Company will comprise the following:
- Jonathan Goldberg – Chairman (Independent Non-Executive Director)
- Anthony Denis Godwin – Chief Executive Officer
- John Philip Ross-Smith – Independent Non-Executive Director
- Siviwe Relebohile Kwatsha – Independent Non-Executive Director
- Dylan Leigh Schemel – Non-Executive Director
- Frank Terence Knox – Financial Director
- Michael Estment – Executive Director
- Andrew Vincent Kent – Executive Director
Section 122 Announcement
Pursuant to the Acquisition and the Issue for Cash, The Michael Estment Family Trust will own a
5.16% beneficial interest in the securities of NVest and such entity will make the necessary
section 121 declarations to the Company subsequent to the Effective date, where after the
Company will make the appropriate section 121 declaration to the Takeover Regulation Panel.
Withdrawal of cautionary announcement
Shareholders are advised that the cautionary announcement is now withdrawn.
East London
25 August 2015
Designated Advisor
Arbor Capital Sponsors Proprietary Limited
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