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Pinnacle buys 100% of Axiz and withdraws caution
Further to the cautionary announcements published by Pinnacle on 14 May 2010 and 23 June 2010, shareholders are advised that Pinnacle has entered into an agreement to acquire 100% of the issued equity of Axiz Technology (Pty) Ltd ("Axiz") ("the transaction").
Background on Axiz
Axiz is a leading IT infrastructure distributor that provides technology intelligence to its business partners through the supply of world class products.
Consideration
The purchase consideration for the acquisition of the sale shares amounts to R170 890 400. In terms of the agreement, R19 690 400 of the purchase consideration shall be paid to Axiz (Pty) Ltd to settle outstanding liabilities owed to Axiz (Pty) Ltd, on behalf of the Axiz Employee Ownership Ltd and Axiz Employee Ownership Trust. These funds will therefore remain within the group. R10 423 905 shall be paid to the Axiz Employee Ownership Ltd and the balance of the purchase consideration shall be paid in two equal tranches to the principal sellers, the first tranche immediately after the closing date and the balance on 1 July 2011.
The principal sellers have the option of discounting the second tranche at prime to facilitate early payment and may elect to receive up to 3 000 000 Pinnacle shares at volume weighted average price measured over the 10 trading days preceding the signature of the agreement, in lieu of such early settlement.
Effective and completion date
The effective date of the transaction is 1 July 2010. The completion date is the second business day after the date of fulfillment of the last conditions precedent.
Conditions precedent
The transaction is conditional upon, inter alia, the fulfillment of the following suspensive conditions:
- Axiz and Pinnacle board approval;
- Obtaining tacit approval from the major Axiz distribution agencies for the transaction;
- The completion of a due diligence investigation by Pinnacle on Axiz to the satisfaction of Pinnacle;
- The completion of employment addenda to ensure a minimum service period of 18 months for certain key employees; and
- Obtaining the approval of the Competition Commission with regards to the acquisition.
Restraint
Comprehensive restraint, non-compete and non-solicitation undertakings have been provided by each of the vendors and exiting employees who are shareholders in, or members or beneficiaries of, any of the vendors.
Warranties
The vendors have provided standard warranties for a transaction of this
nature.
Transaction categorisation
The Axiz acquisition represents a Category 2 transaction in terms of the JSE Ltd's Listings Requirements and therefore does not require Pinnacle shareholder approval.
Withdrawal of cautionary announcement
Further to the cautionary announcements published by Pinnacle on 14 May 2010 and 23 June 2010, Shareholders are advised that caution is no longer required to be exercised when dealing in their Pinnacle shares.
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| Closing price data source: JSE Ltd. All other statistics calculated by ProfileData. |
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