JSE-listed outsourcing firm EOH will purchase Bromide Technologies for R30 million as it makes progress with its plan of hitting the R2 billion revenue mark.
The company told shareholders this morning that it had reached agreement with Bromide's majority shareholders, the Alves Family Trust, Louis Steyn, Elton Lau and Gerard Stickling.
EOH, which indicated in its annual results that it intended expanding its portfolio of offerings, said the takeover was part of its strategy to include infrastructure as it moves to offer "end-to-end" solutions.
In September, EOH CEO Asher Bohbot said the consulting, technology and outsourcing firm aimed to increase its revenue fourfold in the next six years.
At the firm's results, he said it had outlined eight paths to growth that it hoped would aid it in reaching R2 billion in its 2012 financial year, with profit before tax of R220 million. This year it reported revenue of R503 million and profit before tax of R55.8 million.
Bromide, it said in a statement to shareholders, is "a significant player in the infrastructure support services arena, with a large client base and a strong history of delivery and success".
EOH will pay R30 million for the company, which will be paid through a combination of cash, issue of shares and vendor liabilities. The cash component amounts to R9.7 million of the R84 million it had available at the end of June.
Some R13 million will be paid for in shares and the balance will be paid for through the vendor liabilities. Part of the purchase price is subject to Bromide hitting certain profit targets.
The acquisition, which is conditional, should see earnings and headline earnings per share move up 9.9% based on its most recent annual results and other assumptions.
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