Acquisitions at Altron will take a back seat for at least a year, as the listed company focuses on bedding down Altech, the biggest deal in its history after it spent R1.8 billion buying out minorities.
Altron's recent purchase of the stake that it did not already own in Altech is expected to take between a year and 18 months to bed down, as the company shuffles units and extracts synergy.
Altron CEO Robert Venter says there is a lot of low-hanging fruit to be picked thanks to its buyout, which will keep the company busy. He says Altron spent a large amount on the acquisition, its biggest yet, and cannot afford to be distracted by other deals.
However, Venter says the group will not ignore great opportunities as they come along.
Cohesive offering
Altron bought the rest of Altech to benefit from revenue growth opportunities as Altech and Bytes Technology Group become one unit - TMT - which will be able to cross- and up-sell. It eliminated duplication of offerings between the companies and offers investors a single entry point.
Venter explains Altech's IT assets and Bytes were where most of the overlap lay, and most of Altech's IT capabilities are now being shifted to Bytes. The purchase has also led to the creation of new units within each segment to house complementary offerings, he notes.
Altron will now be able to cross-sell and bundle products, as it has removed the previous silo approach, says Venter. This allows it to offer a more cohesive solution, without stepping on toes as different entities are no longer bidding for the same business. "It's a cultural shift that has to take place."
Under telecoms, multimedia and technology (TMT), Altron has created four business legs: telecoms, multimedia, technology and business development. Technology now has five units, apart from the UK business, which has been kept as a separate entity, while telecoms has four strands, and multimedia has two businesses. TMT is led by Craig Venter.
There are also cost savings to be achieved, although this was not the main driver, says Robert Venter. He notes, for example, call centres between Netstar and Autopage can be merged. Eventually, all 10 call centres across the company will be integrated, he adds.
The headcount will be trimmed through a process of natural attrition, explains Venter. He says there are plans to grow customer-facing staff, who need to exploit cross-selling opportunities.
So far, Altron is saving about R10 million a year because Altech is no longer listed, while property consolidation is trimming overheads by another R5 million a year, Venter has said.
The new business
Telecoms, to be headed by Laurence Savage, will be home to Altech Netstar, Altech Autopage (both the cellular side and the Internet service provider), Altech Radio Holdings and Altech Infrastructure Solutions.
Multimedia will also fall under Savage and will encompass Altech UEC and Altech Arrow Distribution. The old Bytes Technology is now TMT's technology arm, and is led by Rob Abraham.
Technology is home to Bytes Core Business Software, Bytes Managed Solutions, Bytes Payment Solutions, Bytes People Solutions, Bytes Document Solutions and Bytes UK.
Business development, which includes a secret endeavour called Project Purple, Altron's Huawei partnership and cross-selling opportunities, is led by Tim Ellis. The Huawei business will be merged with Altech Infrastructure Solutions in about six months.
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