International ICT company Datatec has confirmed its intention to seek a listing on London`s Alternative Investment Market, which it expects to happen this month.
While Datatec will remain domiciled and listed in Johannesburg, the secondary listing is expected to increase the company`s reach.
The company, which is worth around R4.6 billion, told shareholders this morning that a London listing would provide it with greater access to capital and enable it to develop further by enabling geographic expansion and investment in higher-margin service activities.
The listing will see it raise $60 million - or R465 million at R7.75 to the dollar - which it will plough back into the business. CEO Jens Montanana says the company is looking at a few near-term acquisitions, mostly in the US and UK.
"We have a fairly active pipeline of transactions."
Shareholder diversification
Almost all - 98% - of the company`s business is conducted offshore. And, 75% of that is in the US and UK. A London listing will broaden the company`s shareholder base and allow investors in the geographical areas in which it does most of its business to own a piece of the pie.
Montanana says "a London listing is the next logical step for us as an international business. It will give us greater access to capital to support our strategy of organic growth and targeted acquisitions, providing us with a more internationally accepted acquisition currency and enable the group to attract a broader range of institutional investors.
"We are excited at the prospect of a listing in London where we will be one of the larger technology-sector stocks. With three independent business streams, both sector and geographic diversity, and a leading vendor portfolio, we believe that Datatec represents a multi-play opportunity for investors seeking exposure to the high growth networking, security and convergence technologies."
He says that, as all regulatory approvals are complete, the company now only needs to hold an extraordinary general meeting. As the circular to shareholders went out at the weekend, this will be within the next two weeks.
Already, cornerstone investors have indicated they are keen to buy shares, almost guaranteeing $20 million of investment.
The company, which reported revenue up 18% to $2.98 billion in its full-year results, said trading in the half-year was in line with expectations, "with the group delivering a good performance in terms of overall revenues and margins".
Margins in its half-year results - anticipated to be released on 1 November - are expected to be consistent with previous periods, it said.
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