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Disposal of Interest in Subsidiaries
Sebata Holdings Limited
Incorporated in the Republic of South Africa
(Registration number 1998/003821/06)
Share code: SEB ISIN: ZAE000260493
(“Sebata” or “the Group”)
DISPOSAL OF INTEREST IN SUBSIDIARIES
1. INTRODUCTION
The board of directors of Sebata (“the Board”) is pleased to inform shareholders that Sebata has
entered into a sale of shares and claims agreement (“Agreement”) with Growth Capital Partners
Proprietary Limited (“Growth Capital” or “the Purchaser”), the “Management Sellers” (being Colin
Thomas Thornton (“Colin”), Brian Philip Timperley (“Brian”), Louis Alberto Jardim (“Louis”) and Aaron
John Thornton (“Aaron”), the “Exiting Sellers” (being David William John Collins (“David”) and James
Harold Roney (“James”)), Nerdworks Proprietary Limited (“Nerdworks”) and Turrito Networks
Proprietary Limited (“Turrito”) for the disposal of the “Sale Shares” and “Sale Claims” to the Purchaser
for the purchase price detailed in paragraph 2.3 below (“Disposal”).
The Management Sellers, Exiting Sellers and Sebata are collectively referred to hereinafter as the
“Sellers”.
The “Sale Shares” comprise:
o the “Nerdworks Sale Shares” being 6 457 ordinary no par value shares in the issued share capital
of Nerdworks representing 100% of its issued share capital; and
o the “Turrito Sale Shares” being 1 200 ordinary no par value shares in the issued share capital of
Turrito representing 100% of its issued share capital,
each owned by the Sellers in the following proportions:
Seller Percentage of Sale Shares Nerdworks Sale Shares Turrito Sale Shares
Sebata 73.20% 4 727 880
Colin 10.31% 665 124
Brian 6.50% 420 78
Louis 6.70% 433 80
Aaron 1.72% 111 21
David 1.21% 78 13
James 0.35% 23 4
100.00% 6 457 1 200
The “Sale Claims” comprise any and all claims which the Sellers may have against Nerdworks and
Turrito (collectively referred to as the “Companies”) howsoever arising.
The directors of Growth Capital are Ronald den Besten and Timothy Page.
Notwithstanding the “Completion Date” of the Disposal being the later of the first business day after the
fulfilment of the condition precedent detailed in paragraph 2.4 below or 25 May 2020, the effective date
of the Disposal is 1 April 2020 (“Effective Date”).
2. THE DISPOSAL
2.1 Nature of the businesses of the Companies
2.1.1 Nerdworks trading as Dial a Nerd is primarily focused on small businesses, professional
practices and educational institutions, while simultaneously assisting end
consumers/home users with on-site and off-site support. With over 20 years’ experience
in the managed services space, Dial a Nerd provides a vast range of products and
services including network architecture design, fully managed IT services, backup
disaster recovery, cloud services, security and anti-virus solutions. The company also
offers remote monitoring and service level agreements, providing unlimited remote and
telephonic support.
2.1.2 Turrito is an aggregator of every Tier1 telecommunication network in South Africa and
Africa, capable of delivery of all networks, and all solutions, from a single provider.
Customers enjoy open access to every connectivity network, hosting facility, cloud
solution and related telecommunication service from a single provider. As a significant
partner to the major network providers throughout South Africa, Turrito is able to deliver
vast economies of scale and competitive pricing through to customers.
2.2 Rationale for the Disposal
Nerdworks and Turrito have been part of the Group for a number of years and have added
tremendous value both in terms of growth and services offered within the Group. While the Board
had not actively been looking for a buyer, it was approached by the Purchaser, and the
Management Sellers, with the offer to purchase the respective shareholdings in Nerdworks and
Turrito. The Board believes that the transaction unlocks value in the assets which do not fit into
the current portfolio of investments and believes that the management team and the Purchaser
are best placed to take over the assets.
2.3 Purchase Price
2.3.1 The Purchase Price payable by the Purchaser to the Sellers for the Sale Shares and the
Sales Claims is the aggregate of the amounts set out in paragraphs 2.3.1.1, 2.3.1.2 and
2.3.1.3 below subject to adjustment and payable in cash as follows:
2.3.1.1 to Sebata, the purchase price of R24 132 185.00, payment of which will be
reduced by setting off the money owed by Sebata to the Companies, being an
amount of R9 614 339.77;
2.3.1.2 to the Management Sellers, R8 055 050.00 payable to the Escrow Agent, being
attorneys Girard Hayward Inc.;
2.3.1.3 to the Exiting Sellers, R484 950.00.
2.3.2 The amounts comprising the Purchase Price will be paid into the relevant bank accounts
of the Sellers, save for the Management Sellers, whose amount will be paid into the
Escrow Agent’s trust account and dealt with in accordance with the escrow agreement to
be entered into between the Purchaser and the Management Sellers.
2.3.3 The Purchase Price shall be allocated as follows:
2.3.3.1 as to the Sale Claims, the face value thereof; and
2.3.3.2 as to the balance, the Sale Shares.
2.4 Condition Precedent
The Disposal is subject to the fulfilment, by the later of 22 May 2020 or the day falling three days
after the delivery by the auditors of the Companies of the unqualified audited consolidated annual
financial statements of each of the Companies for the year ended 31 March 2020 (“Effective
Date Accounts”) to the Sellers and the Purchaser, and the Purchaser being satisfied, and having
notified the Sellers in writing within the aforementioned period, that it is satisfied with the result of
its due diligence investigations of the Companies.
2.5 Application of the sale proceeds
It is intended that net proceeds of the Disposal will be used to reduce Group debt.
2.6 Restraint
In accordance with the Agreement, the Sellers have undertaken to the Companies and the
Purchaser and their successors-in-title that they will not, during a period of two years from the
Completion Date, offer employment to, or employ, or cause employment to be offered, in a
competitive activity, to any person who is employed in the businesses conducted by the
Companies as at the Completion Date.
3. FINANCIAL INFORMATION
The audited value of the net assets of Nerdworks as at 31 March 2019 is R7.2 million. The audited profit
after tax for Nerdworks for the year ended 31 March 2019 is R1.4 million.
The audited value of the net assets of Turrito as at 31 March 2019 is R22.1 million. The audited profit
after tax for Turrito for the year ended 31 March 2019 is R2.8 million.
The financial statements were prepared in accordance with International Financial Reporting Standards
and the Companies Act, 2008 (Act 71 of 2008), as amended.
4. CLASSIFICATION OF THE TRANSACTION
The Transaction is categorised as a Category 2 transaction in terms of the Listings Requirements of the
JSE Limited.
Johannesburg
15 May 2020
Sponsor
Merchantec Capital
Date: 15-05-2020 04:48:00
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