DVT announces merger plans with USC 13/6/02 5:40:32...

DVT announces merger plans with USC 13/6/02 5:40:32 PM
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DVT HOLDINGS LIMITED 2002-06-13 ASX-SIGNAL-G
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HOMEX - Melbourne
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+++++++++++++++++++++++++
The Boards of Utility Services Corporation Limited ("USC") and DVT
Holdings Limited ("DVT") have announced plans to merge the two
companies.
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Features of the merged company would include:
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* A cohesive strategy in technology solutions for the utilities
market and e-business;
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* A strong management team;
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* Budgeted annual turnover in excess of $150 million;
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* Strong profitability;
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* Cash and convertible notes in excess of $40 million;
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* No bank debt;
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* Expected dividends of at least 4 cents per share per annum (post
reconstruction);
---------------------------------------------------------------------* Approximately 125 million shares on issue (post reconstruction);
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* Market capitalisation of over $80 million based on current pricing.
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The boards of USC and DVT expect a re-rating of the merged entities
based on increased scale, underlying earnings per share, asset
backing and yield.
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THE BUSINESSES OF DVT AND USC
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Attachment A to this announcement provides a fuller understanding of
the operations of each company. Further information can be obtained
on the companies' web sites at:
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www.dvtholdings.com.au
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www.utlityservices.com.au
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HOW THE MERGER WILL BE EFFECTED
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USC shareholders will be offered 18.6 DVT shares in exchange for each
USC share. This translates to 67-72 cents for each USC share based on
recent DVT share prices.
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BOARD AND MANAGEMENT
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It is proposed that, following the merger, the Board of DVT will
consist of seven directors, being five members of the current USC
Board and two members of the current DVT Board. The present executive
chairman of USC, Mr Geoff Lord, will be appointed executive chairman
of the merged entity. Management of the new merged entity will
comprise the existing management team of both groups.
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THE BOARD'S INTENTIONS FOLLOWING THE MERGER
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As soon aspracticable following the merger, DVT intends to hold a
general meeting (which may be the Annual General Meeting) and put to
that meeting certain resolutions for consideration by shareholders to:
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* Approve the reconstruction of capital to consolidate the shares and
options on a 1 for 18.6 basis;
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* Reconstruct the retained earnings to eliminate accumulated losses;
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* Change the name of the company to USC Limited or such other name as
the Board may decide;
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* Ratify a final fully franked dividend of 2 cents per reconstructed
share.
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The Board also intends to introduce a buyback or otherwise deal with
unmarketable shares, and consider a wider buyback programme. In
addition, it is intended that an annual dividend policy will be put
in place on similar terms to that currently in place for USC. This is
anticipated to be at least 4 cents per annum per share(post
reconstruction).
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WHAT THE MERGER PROPOSAL IS DEPENDENT UPON
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* Approval of DVT shareholders to the proposed merger;
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* 90% of USC shareholders accepting the offer;
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Full conditions of the proposed share offer are set out in Attachment
B.
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PROCESS AND TIMING
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The merger will be implemented by way of an off-market takeover bid
as governed by Chapter 6 of the Corporations Act. DVT will prepare a
tons] Offer and a Bidder's Statement within the next few weeks for
lodgement with USC, the Australian Securities and Investments
Commission, and the Australian Stock Exchange. Following the DVT
shareholders' meeting, the Bidders Statement will be dispatched to
USC shareholders for consideration. The USC Board will prepare a
Target's Statement containing its recommendation to USC shareholders.
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USC option holders will be offered options in DVT on terms equivalent
to their USC options in replacement of these options. These offers
will be conditional upon the successful completion of the proposed
merger.
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The takeover documentation will contain all necessary information to
allow USC shareholders to consider the merits of the Offer, and will
be made available publicly within the next few weeks.
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The formal offer process affects USC shareholders and, accordingly,
the Offer and associated documentation will be sent to USC
shareholders, but will not be despatched to DVT shareholders. DVT
shareholders need not take any action in regard to the formal offer
process. In view of the DVT shareholder approval condition, a notice
of meeting incorporating the required resolutions will be forwarded
to DVT shareholders shortly, and it is anticipated the DVT
shareholder meeting will be held on or about 19 July. The meeting
date will be after the Bidders Statement is lodged with USC, the
Australian Securities and Investments Commission, and the Australian
Stock Exchange, and before the takeover offer period commences.
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Should the necessary DVT Shareholders' approval with respect to the
transaction not beforthcoming, the transaction will not proceed. In
such an event, the parties have agreed that DVT will meet USC's costs
in the matter to a maximum of $300,000. Similarly, should offer
condition (b) attached, not be satisfied or waived by DVT the parties
have agreed that USC will meet DVT's costs in the matter to a maximum
of $300,000.
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In the meantime shareholders are advised to DO NOTHING with their
shares in relation to the proposed merger and await documentation as
contemplated in this announcement.
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Enquiries should be directed to
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Jean-Made Simart Geoff Lord
Chairman of DVT Executive Chairman of USC
(02) 9262 9600 (03) 9941 3100
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Mark Hubbard Jim Walsh
Executive Director & Finance Director &
Company Secretary Company Secretary
DVT Holdings Limited Utility Services Corporation
(02) 9262 9140 (03) 9224 5777
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Peter Fraser Jim Richards
Baron Partners Limited, Terrain Capital
Corporate Advisers to DVT Corporate Advisers to USC
(02) 9232 5500 (03) 9620 7555
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ABOUT UTILITY SERVICES CORPORATION
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Utility Services Corporation (USC) is listed on the Australian Stock
Exchange with market capitalisation in excess of $60 million and cash
reserves andconvertible notes of $30 million.
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USC operates through three business groups:
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1. Utility Group comprising construction, inspection and maintenance
of utility power distribution assets, meter installation, meter
reading, data management and related services.
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2. e-Business comprising e-business consulting, solutions and
applications, telecommunications consulting and voice and data
network solutions and services.
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3. Intellectual Property Ventures which holds venture capital-style
interests in strategic technology businesses.
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USC currently has budgeted turnover of approximately $10 million per
month from its existing businesses (including associated entities).
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Attachment B
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DVT OFFER CONDITIONS
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The Offer is subject to the following conditions:
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(a) During, or at the end of, the Offer period DVT becomes entitled
to proceed to compulsory acquisition of all USC's issued shares;
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(b) No person having, or being entitled to have as a result of any
change in control event in respect of any USC Group company, any
right to:
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(i) Terminate or alter any contractual relations between any person
and any USC Group company; or
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(ii) Require the sale of any shares in a USC Group company;
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or such right is unconditionally waived in favour of the relevant USC
Group company and DVT.
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(c) DVT shareholders at general meeting approving the merger.
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(d) No announcement of another superior bid or similar transaction (or
intention to do so) between the date of this announcement and the
expiration of the Offer period. This includes:
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i) no off market takeover offer or on-market takeover for USC's
shares
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ii) no transaction to acquire or merge with USC (whether by way of
joint venture, dual listed structure or otherwise);
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(e) None of the events set out in subsections 652C(l) or (2) of the
Corporations Act 2001 occurs in relation to USC during the period
commencing at the date of this announcement and endingat the
expiration of the Offer period;
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(f) Without the prior written consent of DVT during the period
commencing at the date of this announcement and ending at the
expiration of the Offer period, USC does not other than in the
ordinary course of business;
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i) acquire or agree to acquire a substantial business, asset, or
undertaking, or is subjected to a substantial new liability;
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ii) dispose of or agree to dispose of a substantial business, asset
or undertaking;
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iii) enter into any substantial contract in relation to the operation
or maintenance of its assets;
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(g) After the date of this announcement, USC or a subsidiary of USC
does not declare, pay or distribute any dividend, bonus or other
share of its profits or assets other than a dividend, bonus or other
distribution previously publicly announced;
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(h) After the date of this announcement, no material adverse change
occurs to, or is threatened or announced in relation to the
structure, business, financial or trading position or condition,
assets or liabilities, profitability, or prospects of USC or any of
its subsidiaries;
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(i) No government or governmental, semi-government or judicial entity
or authority or regulatory authority takes any action which restrains
or prohibits the Offer or the acquisition of shares by DVT commences
or threatens to commence proceedings to do so or seeks to require the
divestiture by DVT of shares or assets of USC or any of its
subsidiaries.
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A USC Group company means USC, a subsidiary of USC, and any
associated company of USC.
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http://www.utilityservices.com.au/
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ASX ANNOUNCEMENT - USC and DVT Agree to Merge

13 June 2002

The Boards of Utility Services Corporation Limited ("USC")
and DVT Holdings Limited ("DVT") have announced plans to merge
the two companies.


Features of the merged company would include:

¨ A cohesive strategy in technology solutions for the utilities market
and e-business;

¨ A strong management team;

¨ Budgeted annual turnover in excess of $150 million;

¨ Strong profitability;

¨ Cash and convertible notes in excess of $40 million;

¨ No bank debt;

¨ Expected dividends of at least 4 cents per share per annum (post
reconstruction);

¨ Approximately 125 million shares on issue (post reconstruction);

¨ Market capitalisation of over $80 million based on current pricing.


The boards of USC and DVT expect a re-rating of the merged entities based
on increased scale, underlying earnings per share, asset backing and yield.


The Businesses of DVT and USC

Attachment A to this announcement provides a fuller understanding of the
operations of each company. Further information can be obtained on the
companies' web sites at:


www.dvtholdings.com.au

www.utlityservices.com.au


How the merger will be effected

USC shareholders will be offered 18.6 DVT shares in exchange for each
USC share. This translates to 67-72 cents for each USC share based on
recent DVT share prices.


Board and Management

It is proposed that, following the merger, the Board of DVT will consist
of seven directors, being five members of the current USC Board and two
members of the current DVT Board. The present executive chairman of USC,
Mr Geoff Lord, will be appointed executive chairman of the merged entity.
Management of the new merged entity will comprise the existing management
team of both groups.


The Board's Intentions following the Merger

As soon as practicable following the merger, DVT intends to hold a general
meeting (which may be the Annual General Meeting) and put to that meeting
certain resolutions for consideration by shareholders to:

¨ Approve the reconstruction of capital to consolidate the shares
and options on a 1 for 18.6 basis;

¨ Reconstruct the retained earnings to eliminate accumulated losses;

¨ Change the name of the company to USC Limited or such other name
as the Board may decide;

¨ Ratify a final fully franked dividend of 2 cents per reconstructed
share.



The Board also intends to introduce a buyback or otherwise deal with
unmarketable shares, and consider a wider buyback programme. In addition,
it is intended that an annual dividend policy will be put in place on
similar terms to that currently in place for USC. This is anticipated
to be at least 4 cents per annum per share (post reconstruction).



What the Merger Proposal is Dependent Upon

¨ Approval of DVT shareholders to the proposed merger;

¨ 90% of USC shareholders accepting the offer;

Full conditions of the proposed share offer are set out in Attachment
B.


Process and Timing

The merger will be implemented by way of an off-market takeover bid as
governed by Chapter 6 of the Corporations Act. DVT will prepare a formal
Offer and a Bidder's Statement within the next few weeks for lodgement
with USC, the Australian Securities and Investments Commission, and the
Australian Stock Exchange. Following the DVT shareholders' meeting, the
Bidder's Statement will be dispatched to USC shareholders for consideration.
The USC Board will prepare a Target's Statement containing its recommendation
to USC shareholders.


USC option holders will be offered options in DVT on terms equivalent
to their USC options in replacement of these options. These offers will
be conditional upon the successful completion of the proposed merger.


The takeover documentation will contain all necessary information to
allow USC shareholders to consider the merits of the Offer, and will be
made available publicly within the next few weeks.


The formal offer process affects USC shareholders and, accordingly, the
Offer and associated documentation will be sent to USC shareholders, but
will not be despatched to DVT shareholders. DVT shareholders need not
take any action in regard to the formal offer process. In view of the
DVT shareholder approval condition, a notice of meeting incorporating
the required resolutions will be forwarded to DVT shareholders shortly,
and it is anticipated the DVT shareholder meeting will be held on or about
19 July. The meeting date will be after the Bidder's Statement is lodged
with USC, the Australian Securities and Investments Commission, and the
Australian Stock Exchange, and before the takeover offer period commences.


Should the necessary DVT Shareholders' approval with respect to the transaction
not be forthcoming, the transaction will not proceed. In such an event,
the parties have agreed that DVT will meet USC's costs in the matter to
a maximum of $300,000. Similarly, should offer condition (b) attached,
not be satisfied or waived by DVT the parties have agreed that USC will
meet DVT's costs in the matter to a maximum of $300,000.



In the meantime shareholders are advised to DO NOTHING with their shares
in relation to the proposed merger and await documentation as contemplated
in this announcement.



Enquiries should be directed to:



Jean-Marie Simart

Chairman of DVT

(02) 9262 9600



Geoff Lord

Executive Chairman of USC

(03) 9941 3100



Mark Hubbard

Executive Director & Company Secretary,

DVT Holdings Limited

(02) 9262 9140



Jim Walsh

Finance Director & Company Secretary

Utility Services Corporation

(03) 9224 5777



Peter Fraser

Baron Partners Limited,

Corporate Advisers to DVT

(02) 9232 5500



Jim Richards

Terrain Capital

Corporate Advisers to USC

(03) 9620 7555




DESCRIPTION OF BUSINESSES




About Utility Services Corporation


Utility Services Corporation (USC) is listed on the Australian Stock
Exchange with market capitalisation in excess of $60 million and cash
reserves and convertible notes of $30 million.


USC operates through three business groups:

1. Utility Group comprising construction, inspection and maintenance of
utility power distribution assets, meter installation, meter reading,
data management and related services.

2. e-Business comprising e-business consulting, solutions and applications,
telecommunications consulting and voice and data network solutions and
services.

3. Intellectual Property Ventures which holds venture capital-style interests
in strategic technology businesses.


USC currently has budgeted turnover of approximately $10 million per
month from its existing businesses (including associated entities).




About DVT


DVT provides services and solutions in data storage and management through,
its Data Solutions subsidiary. This business is a market leader and is
run by an experienced management team led by Max Goldsmith. The Data Solutions
subsidiary currently generates revenues of approximately $2.5 million
per month, with strong growth expectations. DVT has a market capitalisation
of approximately $20 million, has substantial cash reserves, and no bank
debt. DVT currently has 550 million shares on issue (equivalent to 29.6
million shares on a reconstructed basis), and has tax losses.


Since August last year, the new board and management appointed at that
time have enabled the company to sell its main asset in January this year
for cash, settle its legal dispute with Cisco Systems and complete a significant
bolt-on acquisition within its Data Solutions business.


Having successfully dealt with a range of legacy issues, the DVT board's
publicity expressed intention has been to seek growth through a merger
such as that now proposed with USC.















DVT OFFER CONDITIONS




The Offer is subject to the following conditions:

(a) During, or at the end of, the Offer period DVT becomes entitled to
proceed to compulsory acquisition of all USC's issued shares;

(b) No person having, or being entitled to have as a result of any change
in control event in respect of any USC Group company, any right to:

(i) Terminate or alter any contractual relations between any person and
any USC Group company; or

(ii) Require the sale of any shares in a USC Group company;

or such right is unconditionally waived in favour of the relevant USC
Group company and DVT.

(c) DVT shareholders at general meeting approving the merger.

(d) No announcement of another superior bid or similar transaction (or
intention to do so) between the date of this announcement and the expiration
of the Offer period. This includes:

i) no off market takeover offer or on-market takeover for USC's shares

ii) no transaction to acquire or merge with USC (whether by way of joint
venture, dual listed structure or otherwise);

(e) None of the events set out in subsections 652C(1) or (2) of the Corporations
Act 2001 occurs in relation to USC during the period commencing at the
date of this announcement and ending at the expiration of the Offer period;

(f) Without the prior written consent of DVT during the period commencing
at the date of this announcement and ending at the expiration of the Offer
period, USC does not other than in the ordinary course of business;

i) acquire or agree to acquire a substantial business, asset, or undertaking,
or is subjected to a substantial new liability;

ii) dispose of or agree to dispose of a substantial business, asset or
undertaking;

iii) enter into any substantial contract in relation to the operation
or maintenance of its assets;

(g) After the date of this announcement, USC or a subsidiary of USC does
not declare, pay or distribute any dividend, bonus or other share of its
profits or assets other than a dividend, bonus or other distribution previously
publicly announced;

(h) After the date of this announcement, no material adverse change occurs
to, or is threatened or announced in relation to the structure, business,
financial or trading position or condition, assets or liabilities, profitability,
or prospects of USC or any of its subsidiaries;

(i) No government or governmental, semi-government or judicial entity
or authority or regulatory authority takes any action which restrains
or prohibits the Offer or the acquisition of shares by DVT commences or
threatens to commence proceedings to do so or seeks to require the divestiture
by DVT of shares or assets of USC or any of its subsidiaries.


A USC Group company means USC, a subsidiary of USC, and any associated
company of USC.