ConvergeNet is acquiring an additional 5.2% in Sizwe Africa IT through the issue of new shares, for a purchase consideration of R26 million.
This will be settled through the issue of approximately 22 222 222 ConvergeNet shares at 108c per share, as well as a cash payment of R2 million.
This will boost ConvergeNet's stake in the company, as it will hold a 56.2% equity interest in Sizwe Africa IT.
Sizwe Africa IT says it will in turn use the proceeds from the transaction to acquire the 30% minority equity interest in Sizwe Infrastructure Technology for a price of R26 million, to be settled by the transfer of 11 111 111 ordinary shares in ConvergeNet at 108c per share and R14 million in cash; R2 million of which will be deferred for three years subject to the continued employment of the Sizwe Infrastructure vendors for a minimum period of three years.
Sizwe Africa IT says it will then hold 100% of Sizwe Infrastructure.
The acquisition is subject to the normal terms and warranties for a transaction of the nature contemplated. Goodwill and other intangibles amounting to R14 785 208 will arise on the acquisition and will be allocated between goodwill and other intangibles at the next reporting period of ConvergeNet.
Sizwe is an ICT services and solutions provider to several private and public organisations. The company says it has been awarded several government term supply contracts.
The company provides comprehensive infrastructure services, including project management, hardware maintenance and installations. It also supplies a number of value-added ICT products and solutions to the local market, and employs over 550 staff and has a country-wide service and support capability.
Sizwe Infrastructure conducts the group's cabling business and is the largest subsidiary within the Sizwe group of companies.
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