DTC
DTC
DTC - Datatec Limited - Logicalis and Promon extend partnership in Latin America
Datatec Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1994/005004/06)
ISIN: ZAE000017745
Share Code: DTC
LOGICALIS AND PROMON EXTEND PARTNERSHIP IN LATIN AMERICA
Datatec Limited, "Datatec" or the "Group", (JSE and AIM: DTC), the international
Information and Communications Technology (ICT) group, announces that its
subsidiary Logicalis Group ("Logicalis") and its partner in Latin America,
Promon SA ("Promon") have agreed changes to their ownership of Promon Logicalis
Latin America Limited ("PLLAL") that will result in Promon continuing as a long
term partner of Datatec in Latin America.
Promon is a large privately held technology, engineering and investment group
that was formed in 1960 and which has regional business interests. It has been
an excellent partner for Logicalis and has assisted in the growth of PLLAL
operations in multiple countries in Latin America since 2008. Promon currently
owns 30% of PPLAL and has a put option on this interest to Logicalis.
Promon has now purchased an additional 10% of PLLAL from Logicalis for $15
million in cash, increasing its share of the business to 40%. As a result
Datatec`s equity ownership of PLLAL through Logicalis will reduce to 60%,
with effect from 31 August 2011. At the same time Promon has agreed to
cancel its put option on its shareholding in PLLAL ("the Transaction").
In accordance with IFRS, the fair value adjustments to this put option liability
have been accounted for by Datatec through its income statement in previous
reporting periods. This substantial charge (as the valuation of PLLAL increased
annually) has been the major component of the negative difference between
underlying earnings per share and headline earnings per share / earnings per
share reported by Datatec. This charge to the income statement associated
with this put option will now fall away. The effects are set out in the table
below.
Jens Montanana, Datatec CEO, commented:
"Since Logicalis first partnered with Promon in May 2008 and formed PLLAL to
develop its existing Latin American business, the PLLAL business has gone from
strength to strength. We are delighted that Promon has committed to the long
term future of PLLAL by acquiring a further 10% interest in the business. We
both see exciting potential for further growth of our shared business in Latin
America"
SMALL RELATED PARTY TRANSACTION PER THE LISTINGS REQUIREMENTS OF THE JSE
Promon is defined as a related party to Datatec due to its existing
shareholding in PLLAL. The Listings Requirements of the JSE require Datatec to
obtain written confirmation from an independent professional expert that the
Transaction is fair to Datatec`s shareholders. Accordingly, Datatec has
appointed BDO Corporate Finance (Pty) Ltd ("BDO"), as the independent
professional expert to provide this fairness opinion. The fairness opinion
is still subject to approval by the JSE and a further announcement will be made
once JSE approval has been received. The Transaction is conditional on receipt
of this approval.
The pro forma financial effects of the Transaction calculated relative to
the year ended 28 February 2011 are set out in the following table:
(US cents) As Pro- forma % change
reported after
transaction
Earnings per Share 22.8 29.8 +30.9%
Headline Earnings per Share 23.9 30.9 +29.4%
Underlying Earnings per Share 37.9 37.5 -0.8%
NAV per Share 392 419 +6.9%
NTAV per Share 159 192 +20.8%
The following assumptions have been made:
- Figures as reported are the audited results of Datatec for the year ended
28 February 2011;
- 186 million Datatec shares in issue at 28 February 2011;
- Interest rate of 5.5% in South Africa where sale proceeds assumed to be
held;
- Tax rate of 28% on interest receivable;
- the NAV and NTAV pro-forma assumes the disposal occurred on 28 February
2011 and that the put option had never existed;
- earnings per share pro-forma assumes the sale proceeds invested and no
mark-
to market adjustment relating to the put option in the year ended
28th February 2011 (minor effect on underlying earnings per share as
this mark-to market adjustment is already excluded from underlying
earnings).
Enquiries:
Datatec Limited (www.datatec.co.za)
Ivan Dittrich - Chief Financial Officer +27 (0) 11 233 1221
Wilna de Villiers - Group Marketing Manager +27 (0) 11 233 1013
Jefferies International Limited
Chris Snoxall +44 (0) 20 7029 8000
College Hill
Adrian Duffield/Rozi Morris (UK) +44 (0) 20 7457 2020
Frederic Cornet (SA) +27 (0) 11 447 3030
Sandton
11 August 2011
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 11/08/2011 08:00:40 Produced by the JSE SENS Department.
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