Ansys Limited said it has made an offer to the shareholders of Profitek Industrial Communications to acquire 100% of the issued share capital and all the outstanding shareholder’s claims against Profitek from Profitek shareholders.
Ansys said in a statement that the offer was accepted by Profitek on 13 July 2017, subject to certain terms and conditions. Ansys release the details of the acquisition as stated below:
2. RATIONALE FOR THE TRANSACTION
2.1 The Transaction gives Ansys the opportunity to create a leading empowered South African engineering
company with a particular focus and strength in the mining sector.
2.2 In line with its corporate strategy, the Transaction enhances Ansys’ safety and productivity business
division, in the Company’s pursuit to become a digital technology solutions provider which leverages its
own Intellectual Property to provide world-class products for global distribution.
3. TERMS AND CONDITIONS OF THE TRANSACTION
3.1 Ansys shall pay the Sellers an upfront amount of R 40 million (“Upfront Amount”) on the Effective Date of
the Transaction to the Sellers as follows:
3.1.1 30% (“thirty percent”) of the Upfront Amount shall be settled in cash (“Upfront Cash Portion”),
equating to R 12 million; and
3.1.2 70% (“seventy percent”) shall be settled by issuing Ansys ordinary shares (“Upfront Share Portion”).
The shares shall be issued at a price equal to the 30 day Volume Weighted Average Price of the
Ansys shares at the Effective Date.
3.1.3 Shares issued as part of the Upfront Share Portion shall not be traded until the calculations as set
out in 3.2 and 3.3 below have been completed.
3.2 A maximum amount of R10 million in addition to the Upfront Amount (“Earn-Out Amount”) may be paid to
the Sellers by Profitek and a maximum amount of R10 million may be clawed back (“Claw-Back Amount”)
from the Upfront Amount. Hence, subject to the Profitek performance during the financial years ending 28
February 2018 (“FY18”) and 28 February 2019 (“FY19”) (the “Earn-Out Period”), the minimum purchase
price shall be R 30 million, and the maximum purchase price shall be R 50 million.
The purchase price is subject to Profitek achieving:
3.2.1 A Warranted Net Profit After Tax for FY18 (“FY18 Warranted NPAT “) of R6.0 million;
3.2.2 A Warranted NPAT for FY19 (“FY19 Warranted NPAT “) of R 9.0 million.
3.3 The Sellers shall be able to participate in the earn-out structure during the Earn-Out Period as follows:
3.3.1 Should the audited NPAT for the financial year ending 28 February 2017 (“FY17”) be less than R5
million (“FY17 Warranted NPAT”), the FY18 Warranted NPAT will be increased by the difference
between the FY17 Warranted NPAT and the audited NPAT for FY17.
3.3.2 An Earn-Out Amount, up to a maximum amount of R 5 million shall be paid to the Sellers, in FY18
(“FY18 Earn-Out Amount”), in addition to the Upfront Amount, should the audited NPAT for FY18 be
greater than the FY18 Warranted NPAT.
3.3.3 A Claw-Back Amount not exceeding R 5 million shall be recouped from the Upfront Amount from the
Sellers in FY18 should the audited NPAT for FY18 be less than the FY18 Warranted NPAT.
3.3.4 An Earn-Out Amount up to a maximum amount of R 10 million, and inclusive of the FY18 Earn-Out
Amount, shall be paid to the Sellers in FY19 (“FY19 Earn-Out Amount”) should the cumulative total
of the audited NPAT for FY18 and the audited NPAT for FY19 be greater than the cumulative total of
the FY18 Warranted NPAT and the FY19 Warranted NPAT.
3.3.5 A Claw-Back Amount not exceeding R 10 million shall be recouped from the Sellers in FY19, should
the cumulative total of the audited NPAT for FY18 and the audited NPAT for FY19 be less than the
cumulative total of the FY18 Warranted NPAT and the FY19 Warranted NPAT.
3.3.6 The discharge of the Earn-Out Amounts for FY18 and FY19, if applicable, shall be in the form of both
cash (“Cash Portion”) and the issuance of Ansys Shares (“Share Portion”) as follows:
184.108.40.206 The Cash Portion shall be 30% of the Earn-Out Amount for the specific financial year-end;
220.127.116.11 The Share Portion shall be 70% of the Earn-Out Amount for the specific financial year-end.
18.104.22.168 The Ansys Shares to be issued in terms of the Earn-Out Amount shall be issued at a price
equal to the 30 day volume weighted average price of the Ansys Shares with such 30 day
period ending on the specific financial year end of the relevant Earn-Out Period.
3.3.7 The discharge of the Claw-Back Amount for FY18 and FY19, as applicable, shall be in the form of a
buy-back of Ansys Shares at a repurchase price of R0.01 (1 cent) per Ansys Share.
3.4 The Transaction is subject to the following key conditions:
3.4.1 Completion of detailed financial, tax and legal due diligence and if deemed necessary a human
resources, IT or commercial due diligence to the satisfaction of Ansys;
3.4.2 The commitment by selected senior staff and management as identified by Ansys to continue their
employment with Profitek during the Earn-Out Period;
3.4.3 The approval of the Transaction from the boards of Ansys and Profitek;
3.4.4 To the extent required, the consent of third parties to material contracts in respect of the change of
control of Profitek;
3.4.5 Sale Agreements being accepted by holders of 100% of the issued shares of Profitek;
3.4.6 The absence of any material adverse change in the business of Profitek;
3.4.7 Profitek retaining all regulatory licenses required to continue to operate;
3.4.8 All such other statutory and regulatory approvals and requirements are complied with and obtained
from the JSE, the Takeover Regulation Panel and the Competition Authorities; and
3.4.9 Restraint of trade undertakings to be recorded in writing with key management and shareholders.
3.5 Certain restrictions have been placed on the sale and/or transfer of the consideration shares.
4. FINANCIAL INFORMATION FOR THE TRANSACTION
The net value of the assets attributable to the Transaction was approximately R 12.9 million as at the year
ended 28 February 2017. Earnings attributable to the net assets that are the subject of the Transaction, was
R 4.2 million for the year ended 28 February 2017.