Faritec Holdings, a JSE listed managed services company, today announced the disposal of its contracting business, Faritec Contracting, to Paracon Holdings for a purchase price of R6.3 million.
Faritec Contracting, which provides resource management services into the South African IT and telecommunication industries, will now be incorporated into Paracon`s resourcing division, a generalist IT resource operation.
As part of the transaction, it is expected that four permanent Faritec employees and an independent contractor base of approximately 100 will transfer immediately to Paracon.
"This is a strategic disposal directly in keeping with our plan to become the leader in the managed services market in Africa," says Simon Tomlinson, CEO of Faritec. "Our contracting business is no longer core to Faritec and we are focused on developing our managed services revenue streams."
Tomlinson went on to say that he anticipated the proceeds from the sale of the contracting subsidiary to be invested into the further growth of the company`s managed services.
The considerations for the acquisition will be funded from Paracon`s available cash resources and the disposal is conditional on receipt of all relevant approvals required, including those necessary under the terms of the Competition Act. Faritec has provided a 48-month restraint of trade undertaking and Paracon has also entered into a restraint agreement with a Faritec employee.
"Faritec`s contracting division is well established in the South African market and has an impressive client portfolio and contractor base," says Graham Bentley, MD of Paracon Resourcing.
Bentley went on to say that the acquisition was part of Paracon`s strategy to expand its contractor and client base in the private and public sector in South Africa, across all technologies and at all levels.
"This acquisition complements our core business of IT contracting. Our BEE credentials, strong client relationships, blue chip client base and excellent balance sheet ensures we remain one of South Africa`s leading ICT Resourcing companies," concludes Bentley.
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