AltX-listed Simeka BSG, a black empowered business solutions group in the ICT sector, will acquire 91.2% of Premium Ideas for R132.5 million.
Premium Ideas, a packaging and smart card personalisation business, has operations in SA and Nigeria.
Simeka BSG says Premium Ideas generates annual revenue of approximately R100 million and offers it an opportunity to exploit synergy with subsidiaries Motoma-Mithratech and Spec Systems. These divisions manufacture scratch cards, and procure and personalise smart cards.
Mohammed Varachia, Simeka BSG CEO, explains: "The acquisition enables the group to capture more of the smart and scratch card value chain in-house. Simeka BSG will now have the capacity to undertake the entire process from manufacturing to personalising and packaging smart and scratch cards."
The purchase consideration will be settled through a R40 million cash payment and R34 million in shares, at R1.70 per share, on conclusion of the acquisition. The balance is payable subject to profit warranties to June 2008.
The acquisition is subject to the asset value assumed on acquisition being no less than R20 million, and the completion of due diligence and requisite regulatory approvals.
Simeka BSG's shares closed flat yesterday at R1.50. The company is expected to release its annual financial results for the year to May 2007 next week.
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