Bytes pays R120m for Intelleca

By Candice Jones, ITWeb online telecoms editor

Johannesburg, 18 Jun 2008

The R120 million acquisition of contact centre business Intelleca Voice and Mobile by Altron subsidiary Bytes Communications Systems has received the competition authorities' stamp of approval.

According to Intelleca CEO Michael Renzon, Bytes will pay the lion's share upfront with a smaller earnings share to be paid later. He says the company will still operate independently under its current name. "This was what attracted us to the deal," says Renzon.

Operationally, Intelleca will continue to focus on its core competencies and report into the Bytes Group through its communication systems division.

Renzon says Intelleca will gain a substantial skills boost from its new partner, growing from 70 employees to around 320. "We needed a large company to take us to the next level. We are now embarking on the second part of our journey as a business."

Intelleca plans to make full use of Bytes' national support infrastructure. "With more resources available, we can pursue projects that we would not have been comfortable with before. This will give us scope for growth, both locally and internationally," adds Renzon.

According to Bytes CFO Peter Riskowitz, Intelleca has a refreshing approach to business, which Bytes appreciates. "Call centre on demand is a good business philosophy, where you can multiply the number of seats you can place in a centre."

Intelleca provides contact centre technology for a monthly fee, with no initial investment in the hardware and software required to start a centre. "Not quite, but essentially a pay-as-you-go call centre," adds Riskowitz.

Significant growth

Bytes is pleased with the acquisition, he says. "Intelleca is an exciting company that has seen significant growth year-on-year since its inception eight years ago, and we are looking forward to working with the young and dynamic spirit it has to offer."

Bytes Communication Systems services around 70 installed contact centres, from SMEs to enterprise clients. Intelleca counts a number of SA's telecommunications network operators among its clients. Intelleca also has operations in Europe, the Middle East, Asia and other parts of Africa.

This is one of two acquisitions concluded by Bytes following the close of its 2008 financial year. The second business is NOR Papers.

Both acquisitions, will initially cost the company "between R200 million and R250 million", said Altron group CEO Robbie Venter at an analyst presentation last month. However, if profit warranties are reached, this will rise to "around R280 million".

Bytes says it expects both companies to contribute around R400 million in revenue a year.

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. The company has said it will continue pursuing other acquisition and expansion opportunities.