Bytes gets buying

By Kimberly Guest for Bytes Technology Group

Johannesburg, 07 May 2008

Altron wholly-owned subsidiary Bytes Technology Group has concluded two acquisitions following the close of its 2008 financial year.

The acquisitions, which are awaiting competition approval, will initially cost the company "between R200 million and R250 million", says Altron group CEO Robbie Venter. However, if profit warranties are reached, this will rise to "around R280 million" according to Bytes CEO, David Redshaw.

The companies in question are Intelleca Voice and Mobile and NOR Papers. The individual transaction values were not disclosed.

At a presentation to analysts yesterday, Redshaw revealed the two companies would contribute approximately R400 million in revenue a year. Both businesses were "nicely profitable", he added.

The company also revealed it had entered into a joint venture in Saudi Arabia, which would see the company offer its electronic health processing solutions in that region.

Going forward, Redshaw says the ICT company is pursuing further acquisition and expansion opportunities.

Bombing BCX

As for the much talked about possible acquisition of IT services player Business Connexion (BCX), Venter says the group is still interested.

"There certainly is some interest in that company's business model and customer base. But I don't believe the timing is right. For one thing, I don't think we've seen the full effect of Telkom's failed acquisition. At this stage, we are not making any moves; we've taken a step back to see what will happen. But never say never," he comments.

In February, BCX released dismal results for the six months ended 30 November. Its management team was heavily criticised by investor analysts, with one analyst questioning BCX CEO Benjamin Mophatlane on whether he was the "right person" to lead the company.

Bytes booming

As for the integration of Bytes into the Altron team, Venter says he is "very pleased" with the process and the ICT integrator's performance.

Bytes became a wholly-owned subsidiary of Altron in January this year. This followed Altron's proposal to Bytes' minority shareholders to engage in a share-swop to facilitate a consolidation of the businesses.

"Bytes has really exceeded our expectations. We set what we felt were ambitious forecasts and they came through, so I am very happy. Even with just two months of their full revenues incorporated into Altron's figures, we can see the difference," says Venter.