4SIGHT HOLDINGS LIMITED - ACQUISITION OF 100% OF XWES PROPRIETARY LIMITED T/A NTSIKA ICT SECURITY

Release Date: 30/04/2018 17:24
Code(s): 4SI
 
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ACQUISITION OF 100% OF XWES PROPRIETARY LIMITED T/A NTSIKA ICT SECURITY

4SIGHT HOLDINGS LIMITED
(Incorporated in the Republic of Mauritius)
(Registration number: C148335 C1/GBL)
(“4Sight Holdings” or “the Company”)
ISIN Code: MU0557S00001         JSE Code: 4SI


ACQUISITION OF 100% OF XWES PROPRIETARY LIMITED T/A NTSIKA ICT SECURITY


1.   Introduction
     The board of directors of 4Sight Holdings is pleased to announce that Foursight Holdings Limited
     (“Foursight South Africa”), a wholly-owned subsidiary of the Company, has entered into an
     agreement and addenda thereto with Ntsika ICT Holdings Proprietary Limited (33%); TV Bensch
     (27%); Pfortner Consulting Proprietary Limited (20%) (“Pfortner”); BV Nditha (8%); Sui Cura Trust (5%);
     MJ Clark (3%); and AJ Hartley (4%) (“Vendors”) for the acquisition of 100% of the shares in XWES
     Proprietary Limited t/a Ntsika ICT Security (“Ntsika”) (the “Acquisition”) with effect from 1 April 2018
     (“Effective Date”). The Vendors are not related parties to 4Sight Holdings. Ntsika will become a
     subsidiary of Foursight South Africa and will adhere to the provisions of paragraph 10.21 of Schedule
     10 of the JSE Listing Requirements.

2.   Description of Ntsika
     Ntsika was formed in 2017 and it is an Internet of Things (“IoT”) cyber security start-up, specialising in
     building security solutions addressing risk appropriate multifactor authentication, secure and
     encrypted communications and early warning threat detection solutions for industrial control
     system and IoT deployments. Ntsika is focused on bridging the gap between operational
     technology and information technology security requirements, enabling the extraction of value
     from secure digitization and industry4.0 initiatives.

3.   Terms and conditions
     The aggregate purchase consideration will be paid primarily on an Earn-out basis (“Purchase
     Consideration”) in 4Sight Holdings shares as set out below, subject to the number of Earn-out shares
     being limited to such number of 4Sight Holdings shares that would not oblige the Vendors to make
     an offer to all 4Sight shareholders in accordance with the provisions of the Companies Act, No. 71
     of 2008:

     3.1   Actual net profit after tax for the 9-month period from 1 April 2018 until 31 December 2018,
           multiplied by a price earnings ratio of 6, divided by 3;

     3.2   Actual net profit after tax for the 12-month period commencing on 1 January 2019 until
           31 December 2019 multiplied by a price earnings ratio of 6, divided by 3; and

     3.3   Actual net profit after tax for the 12-month period commencing on 1 January 2020 until
           31 December 2020, multiplied by a price earnings ratio of 6, divided by 3.

4.    Rationale for the Acquisition
      4Sight has an exclusivity agreement to take Pfortner’s Cyber tech into Mining, Manufacturing, Telco
      and to introduce it into China. Ntsika has the commercial rights for Authlogics. Authlogics and
      Pfortner are leading brands in the Cyber technology space. Cyber Security is a critical element that
      needs to be addressed with any digitisation initiative, especially in the convergence of the
      Information Technology and Operational Technology sectors of mining and manufacturing
      companies.

5.    Conditions precedent
      The Acquisition is subject to the fulfilment of the following conditions precedent by no later than 30
      April 2018 (“Closing Date”):

      5.1   approval by the board of directors of 4Sight Holdings; and

      5.2   any regulatory or JSE approval, to the extent necessary.

6.    Financial information
      There is no prior financial information as Ntsika is a newly formed entity which only started
      operations late 2017.

      The Vendors have provided a gross profit forecast for the periods ending 31 December 2018,
      31 December 2019 and 31 December 2020 as follows:

      Period                                                                           Gross profit forecast
      9 months ending 31 December 2018                                                          R1 383 804
      Year ending 31 December 2019                                                              R4 060 659
      Year ending 31 December 2020                                                              R7 204 932

      The forecasts are considered to be stretch targets and are considered optimistic. The forecasts
      have accordingly not been warranted by the Vendors.

7.    Classification of the transaction
      The Acquisition is classified as a Category 2 transaction in terms of the JSE Listings Requirements
      pertaining to companies listed on the Alternative Exchange of the JSE on the basis that the number
      of shares to be issued will not exceed 34.99% of the Company’s issued share capital at date of issue
      and thus shareholder approval is not required.

30 April 2018
Mauritius

Sponsor
Arbor Capital Sponsors Proprietary Limited

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