VOX - VOX Telecom Limited - Acquisition of Storm T10 Oct 2007
VOX - VOX Telecom Limited - Acquisition of Storm Telecom (Pty) Ltd              
VOX TELECOM LIMITED                                                             
(formerly DataPro Group Limited)                                                
(Registration number 1998/016433/06)                                            
("Vox Telecom" or "the Company" or "the Group")                                 
JSE Code: VOX                                                                   
ISIN Code: ZAE000097234                                                         
ACQUISITION OF STORM TELECOM (PTY) LTD                                          
1.   Introduction                                                               
Further to the cautionary announcement published on 16 August 2007 and renewed  
on 15 October 2007, the board of directors of Vox Telecom ("Vox") are pleased to
advise shareholders that the Company has entered into a binding agreement to    
acquire the entire issued share capital and claims on loan account in STWS      
Limited and its wholly owned subsidiaries, Storm Telecom (Pty) Limited ("Storm  
Telecom") and Storm Internet (Pty) Limited ("Storm Internet") (collectively,    
"Storm"), ("the Storm Acquisition"), with effect from 1 December 2007, from     
Storm`s shareholders ("Vendors").                                               
The purchase price is R360 million to be settled by a combination of Vox`s own  
cash resources, term loan facilities available to the Company as well as a      
placement of Vox Telecom shares to the Vendors, which in turn Vox will be       
obliged to place in the market through a vendor consideration placement.        
The Proposed Transaction remains subject to the conditions precedent set out in 
paragraph 4 below.                                                              
2.   Storm Overview                                                             
Storm is considered one of South Africa`s leading alternative telephony service 
providers, offering voice services via a variety of technologies including:     
Voice over IP ("VoIP"), cellular least cost routing ("LCR") and international   
call back.                                                                      
Storm is also a leading provider of corporate internet services as well as being
the fifth largest domestic internet service provider ("ISP") with a             
sophisticated IP network providing internet access, hosting, virtual private    
networks and security services.                                                 
Storm has more than 6000 customers including many of South Africa`s largest     
public and private corporations. The current Storm annuity income derived from  
its contracted customer base is in excess of R22 million per month.             
3.   Rationale for the Storm Acquisition                                        
Vox Telecom`s strategy continues to be the establishment of the Company as the  
preferred telecommunications alternative to the domestic incumbents, in the     
rapidly converging and deregulating industries of voice and data.               
The Storm Acquisition is regarded as being material for Vox and highly strategic
as it will considerably improve Vox`s positioning in the VoIP telephony market  
and augment Vox`s corporate customer base profile and market share.             
Vox intends integrating Storm`s telephony business into its wholly owned        
subsidiary responsible for corporate telephony solutions, Orion Telecom         
(Proprietary) Limited ("Orion") and the Internet business into its wholly owned 
subsidiaries responsible for corporate ISP services, DataPro (Proprietary)      
Limited ("DataPro") and consumer ISP services, @lantic Internet Services        
(Proprietary) Limited.                                                          
Storm is anticipated to materially improve the scale and strategic position of  
Vox`s existing telephony businesses, particularly their Voice-over-IP ("VoIP")  
technology and contracted managed services VoIP customer base.                  
Similarly, the addition of Storm`s internet customer base will solidify         
DataPro`s corporate ISP positioning as a leading service provider in this market
Most significantly, Vox as a trade buyer is in a distinctive position whereby it
is able to utilise its existing synergistic cost structures and telephony       
platform to leverage material, accretive contributions from Storm`s contracted  
annuity customer base, without adding materially to Vox`s overall overhead      
The acquisition agreements contemplate certain synergy benefit and cost savings 
being achieved by Vox on handover of the Storm business and the effects of this 
will be more fully disclosed in the financial effects of the Storm Acquisition, 
which will be released immediately upon finalisation thereof by Vox.            
4.   Conditions Precedent                                                       
The Storm Acquisition remains subject to the following conditions precedent:    
* By not later than 30 November 2007 Vox obtains the consent of the Exchange    
 Control Department of the SARB to purchase Storm;                              
* By not later than 30 November 2007 those of the sellers who require the       
 consent of the Exchange Control Department of the SARB to remit their share    
 of the purchase consideration overseas obtain such consent;                    
* By not later than 14 December 2007 the Parties obtain final unconditional     
approval for the implementation of the transaction in terms of the             
 Competition Act, 89 of 1998; and                                               
* All other statutory or regulatory approvals as may be necessary, including    
 the approval of the JSE.                                                       
5. Further Announcements                                                        
Further announcements will be made on SENS as soon as the financial effects of  
the Storm Acquisition are finalised and any of the conditions precedent have    
been fulfilled or waived, as the case may be.                                   
10 October 2007                                                                 
Designated Advisor                                                              
Arcay Moela Sponsors (Proprietary) Limited                                      
Corporate Advisor                                                               
Metier Advisory (Pty) Limited                                                   
Date: 10/10/2007 08:00:04 Produced by the JSE SENS Department.                  
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