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Pinnacle - acquisition
The board of directors of Pinnacle (“the Board”) is pleased to advise shareholders that Pinnacle has entered into an agreement (“the Agreement”) with the shareholders of Solareff (Pty) Ltd. (“Solareff”), being Messrs Jacob Hendrik DeVilliers Botha and Dirk Jacobus Botha, to acquire 51 % of the issued share capital of Solareff for a cash consideration, subject to the condition precedent set out below (“the Acquisition”).
Purchase consideration
The purchase consideration for 51 % will be based on 51 % of the Net Profit after tax (“NPAT”) of Solareff, for the years ending 29 February 2016 and 28 February 2017, multiplied by a price earnings ratio of 6.5 less the amount of all existing loans due by certain related parties of the existing shareholders to Solareff on the effective date. These loans will be settled by Pinnacle for and on behalf of such related parties in reduction of the purchase consideration as aforesaid. The remaining 49% of the issued share capital is subject to normal pre-emptive provisions. The purchase consideration is capped at a maximum of R200 million, which would only be achieved if the NPAT of Solareff referred to below, for 2017 was of the order of R60million.
The purchase consideration will be paid as follows:
- On the effective date, an Initial Payment of 80 % of the purchase price based on an estimate of the NPAT for the year ending 29 February 2016;
- An Interim Payment, the balance of 20 %, payable 5 business days after the 29 February 2016 audited annual financial statements have been finalised; and
- A Final Payment - The final payment of the purchase price will be based on the NPAT for the year ending 28 February 2017 less the Initial and Interim payments. The final payment date is 5 business days after the 28 February 2017 audited annual financial statements have been finalised.
For the year ended 28 February 2015, as per the unaudited financial statements, the value of the net assets of Solareff was R 1.8 million(R 7.8 million at 31 October 2015 as per the unaudited management accounts) and the profit after tax for the twelve months ended 28 February 2015 was R 1.4 million (R6.1 million for the eight months ended 31 October 2015 as per the unaudited management accounts).
Conditions precedent and effective date
The acquisition is subject to the fulfilment or waiver, as the case may be, of the condition precedent that by no later than 31 January 2016, Pinnacle delivers to Solareff a written confirmation that it is satisfied, in its sole discretion, that from the offer date (14 October 2015) until 27 January 2016 there has been no material adverse effect on Solareff, its operations, performance, prospects, or business; and no act of insolvency has occurred. The effective date is expected to be 1 February 2016.
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Pinnacle - results of annual general meeting
Shareholders are advised that, at the AGM of the company, held today, all the resolutions as set out in the notice of AGM were passed by the requisite majority of shareholders, with the exception of resolution 3.3, which was withdrawn.
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| Closing price data source: JSE Ltd. All other statistics calculated by ProfileData. |
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