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ADCORP HOLDINGS LIMITED - Appointment of chief executive officer and sale of interest in Nihilent

Release Date: 05/09/2017 11:32
Code(s): ADR     PDF:  
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Appointment of chief executive officer and sale of interest in Nihilent

ADCORP HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1974/001804/06)
Share code: ADR
ISIN: ZAE000000139
(“Adcorp” or the “Company" or the “Group”)
APPOINTMENT OF CHIEF EXECUTIVE OFFICER AND SALE OF INTEREST IN NIHILENT


APPOINTMENT OF CHIEF EXECUTIVE OFFICER AND DIRECTOR

In compliance with the Listings Requirements of the JSE Limited, Adcorp shareholders (“Shareholders”) are referred
to the SENS announcement issued on 31 July 2017 and are advised that Mr Innocent Dutiro has been appointed as
the Chief Executive Officer and an executive director of Adcorp with effect from 1 October 2017.

Innocent, who was the CEO for Africa and Asia at MMI Holdings Limited since June 2016 until recently, is a senior
business executive with extensive and varied executive and board-level experience in Strategy Consulting, Business
Turnaround, Post-Merger Integration, Performance Improvement, and Executive Management in Banking, FMCG and
Engineering Sectors. He holds MSc and BSc degrees in Mechanical Engineering coupled with an MBA Degree
underpinned by a considerable business and personal network across several Sub Saharan countries.

He is a highly effective negotiator and communicator with great people skills along with strong leadership, problem
solving and decision-making abilities and an eye for the bottom-line. He has held senior leadership positions at Bain &
Company, Deloitte Consulting, Gemini Consulting, Nedbank Retail and South African Breweries (SAB), among others.

Some of his most recent professional accomplishments include:

    .    Successfully integrated two disparate wealth management and private banking brands to form a full-service
         wealth and private banking business for one of South Africa’s top 4 Banking groups


    .    Led the successful turnaround of a courier and freight business


    .    Developed and implemented the concept of an online digital financial services business for one of SA’s
         largest insurers


    .    Led the financial and strategic turnaround of one of South Africa’s Development Finance Institutions


    .    Conceived and set up a pan African focused real estate fund for one of SA’s top Asset Managers


    .    As an engineer, he led several power station and chemical plant maintenance programmes


Commenting on the appointment, Ms. Gloria Serobe, Chairperson of the Board of Directors, said “The Board is
absolutely delighted to have secured the services of Mr Innocent Dutiro. He has the ideal business experience, strategic
focus and well-developed network that the Group requires at this critical stage of its evolution. We wish him all the best
and pledge the full support of the Board as he steers the business towards its next stage of growth and profitability”.
SALE OF ADCORP’S 34.6% EQUITY STAKE IN NIHILENT TECHNOLOGIES PVT LIMITED TO DIMENSION DATA
PROTOCOL BV

1.   Introduction

Shareholders are hereby advised that Adcorp Workforce Management Solutions (Proprietary) Limited (“AWMS”), a
wholly owned subsidiary of Adcorp, has entered into a binding subscription and share acquisition agreement on 5
September 2017 with Dimension Data Protocol BV (“Dimension Data”) for the sale of Adcorp’s effective 34.6% equity
shareholding in Nihilent Technologies PVT Limited (“Nihilent”) on the terms and conditions precedent outlined in
paragraphs 2 to 7, below (collectively, the “Disposal”).

2.   Overview of Nihilent

Nihilent is a business consulting and technology services company headquartered in Pune, India. Nihilent provides
consulting, IT outsourcing and IT services, with operations spanning across North America, the UK & Ireland, Africa,
the Middle East, Australia and Asia.

3.   Transaction structure and consideration payable

The Disposal will be achieved through the following:
    .   the subscription of shares by Dimension Data in Hatch Investments (Mauritius) Limited (“Hatch”) Nihilent’s
        Mauritius-based holding company, and
    .   the subsequent capital repayment and share buy-back by Hatch of its shares held by AWMS for total gross
        cash proceeds of USD25.5 million (“Disposal Proceeds”). The effective date of the Disposal is the date when
        all the condition precedents are met.

4.   Rationale for the Disposal

Adcorp is of the view that a sale of Nihilent is in the best interest of Shareholders, on the basis that:

     .   the holding of minority interests in subsidiaries is not in line with Adcorp’s long term strategy;
     .   whilst Nihilent’s business has some overlap with Adcorp’s Professional Services business, Nihilent is seen as
         non-core to the operations of Adcorp; and
     .   the proceeds will strengthen Adcorp’s balance sheet.


5.   Use of Disposal proceeds

Adcorp intends to use the Disposal Proceeds to pay down local debt, thereby reducing the Company’s interest burden
and associated gearing levels.

6.   Net assets and profits attributable to the Disposal

As at 28 February 2017, Adcorp’s net investment in Nihilent reflected a carrying amount of ZAR140.8 million. Adcorp’s
share of profits from Nihilent for the financial year ended 28 February 2017 amounted to ZAR23.4 million.

7.   Outstanding conditions precedent to the Disposal

The outstanding conditions precedent to the Disposal include inter-alia:

     .   The receipt of the unconditional approval of the transaction by the South African Competition Authorities by
         no later than 8 December 2017 or such agreed later date; and
     .   Adcorp, Dimension Data Holdings PLC and Nippon Telegraph and Telephone Corporation’s board approval
         of the transaction by no later than 22 September 2017.

8.   Categorisation of the Disposal

In terms of the JSE Listings Requirements, the Disposal is classified as a Category 2 transaction and does not require
Shareholder approval.
5 September 2017
Bryanston

Sponsor
Deloitte & Touche Sponsor Services Proprietary Limited


Financial Advisor
Investec Bank Limited

Tax and legal advisor to Adcorp
Werksmans Inc


Legal advisor to Hatch
Eversheds Sutherland (Mauritius)

Date: 05/09/2017 11:32:00 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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