Johannesburg, 14 Jul 2005
JSE-listed UCS Group has, through a subsidiary, agreed to acquire CEB Maintenance, a third-party implementation and maintenance services provider, for R48 million.
The acquisition is being carried out by Four Arrows Investments 202 (Newco), a subsidiary of UCS Solutions, which is itself a wholly owned subsidiary of UCS Group.
UCS says the purchase price, in accordance with an agreed methodology, will be increased to a maximum of R60 million to the extent that actual profits exceed warranted profits by more than R1 million for the years to 30 September 2006 and 2007.
"UCS offers the widest range of software, technology solutions and services to the retail and consumer goods industry in southern Africa," says UCS Solutions CEO Richard Newton.
"As the retail industry changes, with companies increasingly focusing on their core businesses and outsourcing more of their support and services, we saw a need to grow our offering in this area."
CEB Maintenance started operating in 1987, and is SA`s largest specialist point of sale maintenance company, with turnover of R130 million, 530 staff and 14 branches in SA, Namibia and Botswana.
Customers include Foschini, Pick`n`Pay, Woolworths, Shoprite Checkers, Clicks, Mr Price, Truworths and Spar franchisees.
Newton says the rationale behind the purchase also included the fact that CEB Maintenance was voted by the majority of tier one retailers as their preferred supplier in surveys undertaken by UCS Solutions.
"There is still a lot of scope for them to expand their business. For instance, many UCS software clients are in the furniture sector, where CEB has little presence," he says.
Newton would not comment on whether UCS Solutions was considering the purchase of a networking company to add to its services.
"A lot of companies are focusing on this. The changes in telecommunications legislation means that non-traditional network suppliers are now also starting up their virtual private networks," he says.
The deal, subject to various conditions, is effective from the close of business on 30 September.
The UCS share closed unchanged at 125c on the JSE yesterday.
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