Cognition plans to buy Private Property from Caxton
Under the R127 million-valued deal, Cognition will become a subsidiary of Caxton.
JSE-listed digital technology firm Cognition Holdings plans to acquire the 50.01 percent shareholding in property listing website Private Property owned by newspaper and printing group Caxton.
The deal, which was announced by Cognition on Monday, has been valued at R127 million, which is more than its market capitalisation of R123.8 million at a share price of 90 cents as of October 8, 2018.
Cognition will purchase Caxton’s shareholding in Private Property in exchange for 105.8-million new shares valued at R1.20 each. This will nearly double Cognition's shares in issue, which are currently 137.6 million shares.
Private Property is one of South Africa’s largest property portals, which enables property buyers to search and find property listings. The company holds a significant market share in the South African property market and, in recent years, has grown its revenues by more than 30 percent.
Caxton bought its stake in Private Property from a US private equity group in September 2017, beating media giant Naspers in an open auction for the business.
Cognition said the Private Property acquisition presents an opportunity to create a company that would be positioned to exploit the digital economy. “Cognition will have further opportunities to acquire appropriate Caxton digital platforms and other owner-managed digital assets from third parties, which together with existing operational divisions, will result in Cognition becoming a growth-focused investment holding company,” it said in a statement.
Cognition said the acquisition strategy is to blend investments that offer technology platforms with digital opportunities to build models that are flexible, fast, collaborative and creative.
The effective date of the acquisition is January 1, 2019.
One of the deal’s condition is that Cognition shareholders will waive the JSE’s rule that a mandatory offer would be triggered by Caxton raising its holding in the smaller company to more than 35 percent. Caxton plans to lift its shareholding in Cognition from 34.7 percent to more than 70 percent, becoming a subsidiary of Caxton.