DTC
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DTC - Datatec - Acquisition of minority interest in logicalis South America
DATATEC LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1994/005004/06)
ISIN: ZAE000017745
Share Code: DTC
("Datatec")
ACQUISITION OF MINORITY INTEREST IN LOGICALIS SOUTH AMERICA
1. INTRODUCTION AND RATIONALE
Datatec announces that its subsidiary Logicalis Group has acquired the
outstanding 20.04% interest in Logicalis South America Ltd ("LSAL") which it
does not already own for a maximum consideration of $6.2 million.
2. THE ACQUISITION
2.1 The business of LSAL
Logicalis Group`s South American business provides integrated ICT solutions
delivering secure network and communications infrastructure and services across
South America with offices in Argentina, Brazil, Chile, Paraguay, Peru and
Uruguay.
2.2 Consideration
The consideration payable on completion will comprise the issue of 398,459 new
ordinary Datatec shares and $2 million in cash payable on completion. The cash
consideration will be funded from Logicalis Group`s existing cash resources.
Additional contingent consideration of a maximum of $2 million will become
payable if certain profit targets are met by LSAL and its subsidiaries in the
financial years ending 29 February 2008, 28 February 2009 and 28 February 2010.
2.3 Financial effects
The acquisition was immediately preceded on 31 August 2007 by the capitalisation
of loans payable by LSAL to Logicalis Group ($1.7 million) and Mr Carlos Lorenzo
($0.5 million). After this capitalisation the share of net assets of LSAL being
acquired is $2.2 million. The share of EBITDA of LSAL for the year ended 28
February 2007 attributable to the minority interest being acquired is $0.7
million.
The pro forma financial effects of the transaction on Datatec`s earnings per
share, headline earnings per share, net asset value per share and net tangible
asset value per share for the year/period ended 28 February 2007 are not
significant (i.e. are less than 3%), and have therefore not been disclosed.
3. CONDITIONS PRECEDENT AND LISTING
The implementation of the acquisition is not subject to any conditions
precedent.
Application has been made to the London Stock Exchange for the admission of the
new Datatec shares to the Alternative Investment Market, and to the JSE Limited
for the listing of these shares. Listing on both exchanges is expected to become
effective on (10) October 2007.
4. SMALL RELATED PARTY TRANSACTION
As the minority interest in LSAL will be acquired from Mr Carlos Lorenzo, who is
a director of LSAL and its subsidiaries and therefore a related party of
Datatec. The Listings Requirements of the JSE require written confirmation from
an independent professional expert, confirming that the Acquisition is fair and
reasonable to Datatec`s shareholders. Deloitte & Touche has confirmed that the
Acquisition is fair and reasonable and their report is available for inspection
at Datatec`s registered office until 1 November 2007.
Sandton
2 October 2007
Merchant bank and sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 03/10/2007 08:00:01 Produced by the JSE SENS Department.
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