Listed outsourcing company Business Connexion (BCX) has wrapped up its R614 million purchase of several UCS assets and is now focusing on integration.
However, a third party is keen to buy out one of the UCS units from BCX, which could see UCS being paid out even more for the entities it spun off.
In a joint cautionary earlier this month, the companies said the deal was effective 11 May, but both parties are in talks with another - unnamed - party that has “expressed an interest” in one of the units UCS sold.
Last December, BCX said it was buying Accsys, CEB Maintenance Africa, Destiny Electronic Commerce, UCS Solutions, as well as UCS Technology Services. All of the subsidiaries - apart from Destiny, in which UCS has a 70% stake - are wholly-owned by the listed software company.
BCX paid R614 million, making it the largest acquisition the group has made. The deal was mostly financed through shares, which were unbundled to UCS shareholders. Another R30 million will be paid if the UCS units meet certain profit warranties.
Work starts now
Yesterday, BCX issued an announcement indicating that the deal is now finalised and the units are being merged into BCX's business. Matthew Blewett, group executive of mergers and acquisitions, says the completion of the purchase reflects the culmination of a major strategic thrust by BCX.
“The company has long recognised the value of 'in-house' software intellectual property. The UCS divisions substantially enhance this value, while adding further expertise through the services and solutions components of this acquisition,” he says.
However, says Blewett, more work lies ahead as BCX now has to integrate the units to “fully expose their value for our clients and for shareholders. The medium- to long-term success of the deal depends on our ability to retain existing clients of both organisations, while also expanding the offerings to them and new clients.”
Blewett says the ultimate success of the acquisition lies in the execution of this integration. “Therefore, if anything, the real work starts now.”
CEO Benjamin Mophatlane said in April that UCS will boost BCX's position in the market, and offers extensive cross-selling opportunities. In addition, he says, there are opportunities to drive UCS's offerings into Africa, where BCX has a presence in Namibia, Nigeria, Mozambique, Tanzania, Zambia and Kenya.
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