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Acquisition of Business of Conor Solutions
ADAPT IT HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1998/017276/06)
Share code: ADI ISIN: ZAE000113163
(“Adapt IT Holdings”)
ACQUISITION OF BUSINESS OF CONOR SOLUTIONS
1. INTRODUCTION
The board of directors of Adapt IT Holdings (“the Board”) is pleased to inform shareholders that Adapt IT
Holdings, through its wholly-owned subsidiary, Adapt IT Proprietary Limited (“Adapt IT”), has entered into
a Business Purchase Agreement (“Agreement”) with Conor Solutions Proprietary Limited (“Conor
Solutions” or “the Seller”) to acquire the business of the Seller (“the Acquisition”).
In terms of the Agreement, Adapt IT will acquire:
- the business enterprise of the Seller as a going concern, which includes the assets and related
business enterprise previously conducted by 4Digits Solutions Proprietary Limited (“Conor
International”) as integrated with the Seller’s, as a going concern;
- the Seller’s assets, with the exception of certain excluded assets;
- the employees; and
- certain liabilities.
The Acquisition will be implemented on the "Closing Date", being the later to occur of 30 November 2018
or the first business day of the month immediately following the month in which the last of the conditions
to Closing, as detailed in paragraph 2.5 below, is fulfilled, or, to the extent permissible, waived (“Closing”).
2. THE ACQUISITION OF CONOR SOLUTIONS’ BUSINESS
2.1 Nature of the Conor Solutions business
Conor Solutions operates in the ICT sector focused on mobile technologies providing turnkey
technology solutions to mobile operators, financial institutions, enterprises, and SMMEs in Africa
and South America.
Its main competencies include the following:
- middleware and integration;
- VAS consolidation;
- rating charging and bundle management;
- core network design and optimisation;
- service development;
- data monetisation;
- enterprise mobility;
- mobile fintech;
- data analytics and visualisation;
- mobile app and web portal development; and
- authorisation, authentication and accounting.
2.2 The rationale for the Acquisition
The Acquisition will provide Adapt IT with access to key proprietary software, customers and
markets in the telecommunications space in South Africa as well as key markets in Africa including
DRC, Tanzania, Lesotho and Namibia.
2.3 Purchase Consideration
The transaction is concluded on a cash and debt free basis. The total purchase consideration
payable by Adapt IT to the Sellers in respect of the Acquisition is an amount of R80 million and
comprises:
2.3.1 An instalment of R48 million payable in cash at Closing; and
2.3.2 a deferred amount of R32 million to be paid:
2.3.2.1 on the Closing Date to Adapt IT’s attorneys to be held in escrow in an interest
bearing trust call account; and
2.3.2.2 together with any interest accruing, to the Seller after 24 months calculated from
the Closing Date.
2.4 Seller
The ownership structure of the Seller includes a number of ordinary shareholders, the controlling
shareholder of which is Jed Holdings Proprietary Limited (“Jed Holdings”). The ultimate beneficial
shareholders of Jed Holdings are Mr Edwin van Zyl, Mr Jacob Oosthuizen and Mr Duncan de Klerk.
2.5 Conditions to Closing and effective date
Closing is subject to the fulfilment (or, to the extent permissible, the waiver) on or before the Closing
Date of certain conditions precedent, including:
2.5.1 the approval of the boards of directors of Adapt IT and of Adapt IT Holdings respectively,
of the Acquisition;
2.5.2 the approval of the board of directors of the Seller of the Acquisition;
2.5.3 the approval of JED Holdings of the Acquisition, as the controlling shareholder of the
Seller;
2.5.4 Adapt IT and each of the identified key executives or managers of the Seller having
concluded and signed employment contracts and restraints of trade agreements;
2.5.5 the Seller having procured the written unconditional consent and assignment of key
customer contracts to Adapt IT or alternatively, the Seller has procured valid, binding
substitute agreements between Adapt IT and each relevant customer to replace such
customer contracts and other assigned contracts with the Seller and its affiliates, as
applicable, on terms and conditions which are no less favourable and which are
acceptable to Adapt IT;
2.5.6 the Seller having procured the assignment by the Seller to Adapt IT of key supply
contracts, on terms and conditions acceptable to Adapt IT; and
2.5.7 the Seller having procured that each of the shareholders of the Seller have signed non-
compete undertakings.
The Agreement contains warranties which are usual for transactions of this nature.
The effective date of the Acquisition will be the Closing Date.
3. FINANCIAL INFORMATION
The value of the net assets that are the subject of the Acquisition as at 31 March 2018 was R13.2 million.
The revenue attributable to the net assets that are the subject of the Acquisition for the year-ended
31 March 2018 was R87.8 million. The profit attributable to the net assets that are the subject of the
Acquisition for the year-ended 31 March 2018 was R17.7 million. The net assets, revenue and profit are
the combined amounts of Conor Solutions and Conor International as at 31 March 2018 and the Seller did
not consolidate the 2 entities. The net assets are the total amount before adjusting for excluded assets
and excluded liabilities.
4. CLASSIFICATION OF THE ACQUISITION
The Acquisition is classified as a Category 2 transaction in terms of the Listings Requirements of JSE
Limited.
5 November 2018
Sponsor
Merchantec Capital
Legal Advisor to Adapt IT Holdings
Garlicke & Bousfield Inc. Attorneys
Legal Advisor to the Seller
Rina Rheeders Attorneys
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