CS Holdings acquires Getronics SA for R43 million - adding R185m in annual revenue

In a deal worth more than R43 million, CS Holdings has announced that it has acquired Getronics SA, a subsidiary of one of the world`s leading providers of information and communications technology (ICT) solutions and services to professional users. This announcement will position CS IT Solutions, the infrastructure support and services division of JSE-listed CS Holdings, as one of the biggest suppliers of IT networking and infrastructure support services in South Africa. As part of the agreement, CS Holdings has also entered into a strategic alliance agreement with Getronics worldwide.

According to CS Holdings CEO Annette van der Laan, "This acquisition and partnership is of great strategic importance to CS Holdings. It allows us with the international backing to render a more comprehensive and progressive service to our international clients as well as our clients with operations in Africa. CS Holdings has for long enough been referred to by critics as a small player in the IT sector. This announcement will certainly enhance our profile, as we are now perfectly positioned to compete head-on with the first-tier IT players in the South African market."

The anticipated revenue contribution for the financial year ending 30 June 2002 as a result of the acquisition is estimated at more than R185 million. Approximately 75 percent of the Company`s added revenue is annuity based in terms of long outsourcing and support contracts with Getronics` current client base and includes a large number of blue chip clients worldwide.

Frans Kleipool, Getronics NV senior vice-president: Corporate Development, says CS IT Solutions and Getronics SA apply the same business model. "They both supply high-value, end-to-end IT solutions to their clients. They provide high-value business solutions and vendor-independent technology consulting, system integration, and outsourcing services to their clients in order to develop lasting partnerships in targeted industry segments. Their service offerings are divided in three main business lines namely business solutions and consulting; infrastructure integration which includes network and enterprise system integration; and managed services which includes on-site support, helpdesk, network and asset management."

Getronics SA is represented in all the major regions in South Africa through an infrastructure of 38 branches and currently employs more than 500 staff. The Company offers the same main service lines as its international counterpart. The main revenue contributor is Managed Services which accounts for approximately 80 percent. The balance is generated by Infrastructure Integration (about 11 percent) and Business Solutions (about 9 percent).

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In addition, Getronics SA`s added experience in increasingly critical technology solutions disciplines, such as e-Business and Customer Relationship Management (CRM), will enable CS Holdings to meet growing customer requirements for these services. "As a condition of the acquisition agreement, Getronics NV and CS Holdings will enter into a Strategic Alliance and Service Partnership agreement whereby international clients of Getronics SA will continue to be supported and serviced by Getronics NV and similarly CS Holdings will continue to support international clients of Getronics NV in South Africa. This agreement will also provide CS Holdings with access to the worldwide infrastructure, experience and knowledge of Getronics in the IT outsourcing space as a strategic partner," concludes Van der Laan.

The acquisition of Getronics SA and Strategic Alliance agreement with Getronics NV will greatly enhance CS Holdings` systems integration and outsourcing offerings and complement its business consulting services. Overlapping services, geographical representation and infrastructure will be merged with those of CS IT Solutions in order to unlock the obvious rationalisation benefits, increase capacity utilisation and thereby increase profitability. Getronics SA`s highly skilled consultants in the high-value LAN and WAN technology integration environment and its partnership status with leading platform and technology suppliers, adds further dimensions to the service delivery capability of CS Holdings.

Finally, the acquisition is subject to the approval for and subsequent listing of the new shares by the JSE, the approval by the Competition Commission and other regulatory authorities.