GijimaAst, listed on the JSE Securities Exchange, today announced that is has acquired the outstanding 30% interest in DTS from Absa Bank. DTS will declare a R36 million dividend to Absa, following which the shares held by Absa will be purchased for R44.5 million with effect from 1 July 2006.
The transaction requires GijimaAst shareholder approval, as well as the required regulatory approvals. The earnings enhancement for the six months to December 2005 on reported headline earnings per share would have been an increase of 17% to 1.25c, had the transaction been implemented on 1 July 2005. The impact on headline earnings per share would have been further enhanced by 0.47c per share had it not been for the once-off STC associated with the dividend.
DTS is a jointly-owned entity which was formed in April 2000 from Absa`s Distributed Computing Services and AST Desktop Services. DTS has managed Absa`s desktop environment since formation, and other key clients of DTS include Kumba Resources, Mittal Steel, Afgri and the Government Employees Pension Fund. GijimaAst recently secured a new outsourcing contract with Absa valued at R960 million, offering a fully managed desktop service to Absa for a five year period which commences in December 2006.
While this has been a successful investment for Absa, the rationale for the disposal of its 30% interest in DTS is to focus on core business activities.
Pieter van der Merwe, executive director of Absa, said that "Absa enjoyed a very rewarding partnership with GijimaAst over the last six years. Selling our interest in DTS was the logical next step as our partnership developed. Absa`s intention of becoming the pre-eminent bank on the African continent will however require Absa`s devotion to its core business, together with the future support of partners such as GijimaAst."
As regards the announcement, John Miller, CEO, GijimaAst notes that "we have enjoyed an excellent relationship with Absa, built on mutual respect, trust and service delivery. We believe that we`ve added value over the years which, if even in some small way, has contributed to the many successes and accolades awarded to Absa while co-owners of DTS. We are confident that this relationship will continue to grow, based on the recent award of a five-year contract for us to provide services to Absa."
The transaction will allow GijimaAst to fully integrate DTS into its group structure and product offering in line with convergence in the ICT industry.
"We are delighted with the acquisition, which should enable further improvements in operating efficiencies following the merger," concludes Robert Gumede, Executive Deputy Chairman, GijimaAst. "Together with our excellent BEE credentials, we will now be able to strengthen our proposition to clients in line with their requirements."
Share
Editorial contacts