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Adapt IT acquires CQS for R217m

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 19 Oct 2015
Adapt IT makes acquisitions in the sectors or markets where it feels it is not strong enough, says Sbu Shabalala, CEO of Adapt IT.
Adapt IT makes acquisitions in the sectors or markets where it feels it is not strong enough, says Sbu Shabalala, CEO of Adapt IT.

JSE-listed Adapt IT has acquired CQS Technology for R217 million.

CQS Technology is a provider of niche audit, financial and risk management software services and solutions to financial professionals, corporates and the public sector.

Speaking to ITWeb this afternoon, Sbu Shabalala, CEO of Adapt IT, said the company paid R160 million in cash and raised the remainder from shares.

Earlier this year, Adapt IT said it was on the lookout for niche software companies to add to its portfolio.

The CQS deal comes after Adapt IT posted a strong set of full year results, with operating profit growing by 89% to R93.8 million. Turnover for the year to June 2015 increased 42% to R575.3 million, with organic growth at 18% and acquisitive growth adding 24% to turnover.

CQS has over 20 years' experience in providing software services and solutions, for audit, data analytics, controls monitoring risk management and financial reporting to more than 4 000 customers in 30 countries.

According to Adapt IT, this targeted acquisition is in line with its strategy of planned acquisitive growth and allows the company to further expand and strengthen its customer base and solutions set, especially in the financial services sector, and the wider private and targeted public sector markets.

Shabalala said the company makes acquisitions in the sectors or markets where it feels it is not strong enough, or simply to enter new markets and open new revenue streams.

He added the numerous synergies between Adapt IT and CQS only highlight the value of this acquisition in augmenting Adapt IT's overall growth strategy, not only in key sectors in SA but wider markets in Africa.

"Adapt IT and CQS can benefit from the synergy and scale advantages that already exist to leverage further opportunities to increase revenue and returns. The entire CQS leadership and operational teams will remain with the business."

CQS CEO Ashley Cohen says: "Our aim is to deliver optimal return on investment to customers by providing a complete solution; consisting of software, implementation and training, and using focused best practice methodologies. CQS and Adapt IT's shared customer-focused approach and similar values will ensure we continue to benefit our customers whilst improving our overall value proposition in the market."

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