Tuesday 8th March 2005
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As a result of the acquisition of this IT Group, Cube will become a significant New Zealand based IT business, with operations covering three areas:
The Acquisition is subject to a number of conditions including:
Consideration will be the issue of approximately 100 million shares at 13.64c per share and a cash balance component to be finalized.
The cash component and further working/growth capital will be funded by existing reserves realised from the recent sale by Cube of Damba Furniture and Traveltech Publishing, and the issue of approximately 64 million shares for cash at 13.64c raising $8.7 million.
Projected revenues of in excess of $25m and EBITDA of $3.85m are expected in the year to 30 June 2006 from the acquisition.
Simon Wallace, executive chairman of Cube, said "Once this transaction is approved and finalised the new future of Cube will see it focused solely in the IT area - an area very different from its past, but offering significant growth prospects. As a result of the transaction I will be separating from the company, but believe that this future represents a strong and long term growth prospect for all shareholders. It is envisaged that the new group will recommence dividends from 2006."
Other than cash and receivables Cube's only other asset is an investment in a financial services company based in Sydney. Furthering Cube's strategy announced last year it is intended that the financial services' company obtains its goal of reaching scale and Cube is evaluating opportunities to enhance future returns for shareholders.
Cube is considering its options, but initially expects to distribute this business to its shareholders in specie. Discussions are underway internally and with the incoming management as to the most appropriate outcome to maximise shareholder value. It is planned that this business will list on the Australian Stock Exchange at the earliest opportunity.
Further announcements will be made in due course concerning the IT Group, independent appraisal, transaction timing and the proposed new board structure.
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