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Acquisition Of Tarsus Technology Group Proprietary Limited (“Tarsus”) And Withdrawal Of Cautionary Announcement
Alviva Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 1986/000334/06
Share Code: AVV ISIN: ZAE000227484
(“Alviva” or “the Company”)
ACQUISITION OF TARSUS TECHNOLOGY GROUP PROPRIETARY LIMITED (“TARSUS”) AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Further to the cautionary announcement released on SENS on 13 October 2020, shareholders are
hereby advised that Alviva (or a subsidiary to be nominated by it) (“the Purchaser”) has on 12 November
2020, entered into a share purchase agreement (“SPA”) with Mamzen Proprietary Limited (“the Seller”)
to acquire the entire issued share capital of Tarsus, for a maximum purchase consideration of
R185 388 000 (“Purchase Consideration”), (the “Acquisition”). The Acquisition will be effective on the
third business day following the date on which the last of the conditions precedent referred to in
paragraph 5 hereof, has been fulfilled or waived, as the case may be (“the Closing Date”).
2. Description of the business of Tarsus
Established in 1985, Tarsus is a choice partner in handling and distributing some of the world’s most
prominent IT brands to the Southern African reseller channel. Tarsus has expanded into multiple
regions across sub-Saharan Africa. Tarsus offers its customers high quality products within the wider
technology distribution ecosystem, supported by professional solutions in supply chain optimisation,
cloud, and security.
The Tarsus Group has two main operating subsidiaries: Tarsus Distribution (Pty) Ltd, the company that
owns the South African, Botswana and Namibian IT distribution operations, and Tarsus on Demand
(Pty) Ltd, a company which operates a cloud solutions business. Excluded from the transaction is the
GAAP Point-of-Sale software business, which will be distributed, prior to Alviva’s acquisition, to the
current shareholders.
The Tarsus distribution business provides access to world-class supply chain services by leveraging
integrated digital capabilities to enable partner resellers to deliver enhanced end-customer experience,
and the Tarsus cloud business offers a platform, complementary applications and hybrid solutions to
assist customers with the benefits of Cloud As-A-Service easily and in the most cost effective manner.
3. Rationale for Alviva
The acquisition of Tarsus is pursued primarily for the following reasons:
. Expansion of the current IT distribution businesses into the retail customer segment where
Alviva has limited exposure;
. Expansion of the product baskets by adding new vendors;
. Further expansion into Africa. Tarsus’ African business exceeds R670 million in revenue; and
. Growth in the cloud solutions business. Tarsus’ cloud business is significantly larger than that
of Alviva.
4. Terms of the Acquisition
The Purchase Consideration of R185 388 000 is payable in cash as follows:
. R100 000 000 on the Closing Date;
. R27 488 000 less:
o certain payments which may be paid prior to the Closing Date to the management
of Tarsus;
o the difference between R167 000 000 and the amount of the net asset value
(“NAV”) of Tarsus at the Closing Date, limited to R5 000 000,
6 months after the Closing Date;
. R32 800 000, 18 months after the Closing Date; and
. R25 100 000, 30 months after the Closing Date.
The Acquisition is subject to warranties and indemnities normal to transactions of this nature.
5. Conditions precedent
The Acquisition is subject to the fulfilment of the following principal outstanding conditions precedent
(“Conditions Precedent”):
. the counterparty to each material contract in respect of Tarsus has (if so required by the
relevant contract) either been notified of or consented to, the change of control or change
of shareholding in Tarsus;
. a written agreement, incorporating the terms and conditions of the term sheet in respect of
the working capital facility, is concluded between Tarsus and Investec Bank Limited, on
terms reasonably acceptable to the Purchaser;
. the relevant approvals being obtained from the relevant Competition Authorities, in the
jurisdictions in which Tarsus and its subsidiaries operate, for the Acquisition; and
. by the Closing Date, the Purchaser’s confirmation to the Seller, in writing, that no material
adverse change in respect of Tarsus, as defined in the SPA, has occurred.
The Conditions Precedent are required to be fulfilled by various dates specified in the SPA, the latest of
which will, in respect of the various competition approvals, be within 150 business days from the date of
registration of the relevant merger notifications, provided that the parties may agree to extend the dates
for fulfilment.
The Acquisition will be implemented on the Closing Date referred to in paragraph 1 above.
6. Financial Information
The audited value of the net assets of Tarsus that is the subject of the Acquisition as at 28 February
2020 was R185,8 million. The audited profit after tax attributable to the net assets of Tarsus that is the
subject of the Acquisition for the year ended 28 February 2020 was R34,8 million.
The audited annual financial statements for the year ended 28 February 2020 were prepared in
accordance with International Financial Reporting Standards and the Companies Act, no.71 of 2008.
7. Classification of the Acquisition
The Acquisition is classified as a Category 2 transaction in terms of the Listings Requirements of JSE
Limited (“JSE Listings Requirements”), and therefore does not require Alviva shareholder approval.
8. Subsidiary
Upon implementation of the Acquisition, Tarsus will become a subsidiary of Alviva. Its memorandum of
incorporation does not in any way influence or relieve Alviva’s compliance with its obligations in terms
of the JSE Listings Requirements.
9. Withdrawal of Cautionary Announcement
With reference to the information disclosed in this announcement, shareholders are no longer required
to exercise caution when dealing in their Alviva shares.
Johannesburg
12 November 2020
Legal Advisor to Alviva: Tugendhaft Wapnick Banchetti & Partners
Sponsor: Deloitte & Touche Sponsor Services (Pty) Ltd
Legal Advisor to Seller: Webber Wentzel
Financial Advisor to Seller: Investec Bank Limited
Date: 12-11-2020 04:39:00
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