Bytes Technology Group is buying UK-based Plato Computer Services for between R369 million and R459 million, based on today`s exchange rates.
Plato, which began operations in 1984 as an independent software and services consulting business, is a multi-functional supplier of IT services to a broad range of blue chip customers.
Its skills include applications development and technical and managed services.
The acquisition is costing Bytes at least lb22.5 million in cash. Plato`s performance in the year to 31 December will determine how much of a further lb5.5 million cash is to be paid.
Bytes says although existing UK subsidiary Bytes UK is profitable, it has been concerned for some time about the potential vulnerability associated with its extensive dependence on its software licensing business.
"To this end, the group has embarked on an objective to diversify its IT activities in the UK, a strategy which it is believed would best be achieved through the acquisition of a broad-based IT services business to complement Bytes UK`s existing offering.
"Plato provides in-depth and mission-critical IT solutions to a relatively select number of blue chip corporates while Bytes UK provides a high-level service to a broad range of customers."
Plato also owns 100% of IT recruitment company Priam Solutions.
The deal is subject to regulatory and shareholder approval. The Bytes share price was unchanged at 350c on the JSE this morning.
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