Datatec`s planned disposal of its RangeGate mobile technology subsidiary to Canadian-listed Versatile Mobile Systems has fallen through.
The group had planned to sell RangeGate to Versatile for 23 million shares in Versatile, with Datatec receiving 20 million shares and RangeGate management the balance.
The deal was subject to receiving regulatory approval and final due diligence.
However, the group says not all regulatory approvals were received and the disposal was called off.
Datatec director David Pfaff says the deal was not directly prevented, but it was abandoned after an SA Reserve Bank regulation meant Datatec could not get the value it wanted from the deal.
In terms of the regulation, the Versatile shares would have had to be converted to cash as soon as possible, whereas the deal was intended to build up RangeGate.
Pfaff said when the deal was announced in December that the fit between Versatile and RangeGate was highly synergistic, and the combination of the two was the best way to create the strongest and most profitable company possible.
Datatec executive chairman Jens Montanana, who owns about 2.2% of Versatile`s shares and holds 350 000 options, has been a Versatile director since 1997.
Pfaff says the group will maintain its interest in RangeGate and will continue to develop opportunities in the mobile technology sector.
"RangeGate and Versatile have a strong working relationship and it makes sense for us to continue working together on opportunities where both companies can add value," he adds.
He says while no formal partnership is on the cards, RangeGate and Versatile will continue to work together for strategic purposes.
Datatec announced last week that it had acquired the assets and staff of Business Partners, a subsidiary of the Dutch-based Landis Group.
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