Dialogue buys Continuity SA share

Johannesburg, 02 Aug 2007

AltX-listed Dialogue Group has taken a controlling interest in business continuity and disaster recovery specialist Continuity SA.

This morning, the company told shareholders it would pay R41 million for the 51% shareholding, with Continuity SA MD Allen Smith retaining a 49% interest in the company. The consideration will be partly funded from the R35 million raised in listing last year. The balance will be funded through the placement of Dialogue shares with select institutions or BEE shareholders, says the company.

Although the companies already share many customers, Dialogue CEO Jason Drew says the acquisition presents an opportunity to cross-sell its services to clients which Dialogue does not currently service.

Additionally, business continuity and disaster recovery services offer considerable growth potential, he says.

"An estimated 80% of all disaster recovery operations locally are currently managed in-house, which depletes efficiency. Statistics illustrate the considerable growth potential in an outsourcing market for these services."

Drew adds: "We will utilise our established presence in the business process outsourcing market to promote these services as part of our existing offering, and in so doing, boost our revenue and earnings going forward."

The company is hinting more deals could be on the way. It noted it was not withdrawing the cautionary posted on Friday as it is still involved in discussions.