IFCA Technologies is selling its only IT unit, sWare, for R1 000, and moving into the outdoor lighting and exhibition sectors as it moves on implementing its new strategy.
IFCA says it is selling its only operating entity, sWare, and buying two other entities, Third Wave and the Out & About Marketing and Media. It will also undergo a change in control after a shareholder bought out more than 35% of its listed stock.
The company, founded in 2006, will use a three-year $100 million facility it secured in November last year. If the deals go through, it will also be rebranded and move to the JSE's main board.
In a statement to shareholders on Friday, IFCA said it would sell IFCA Software (sWare) to Squirewood Investments. Squirewood will buy out the unit and shareholder loans worth R4.9 million, for R1 000, says IFCA.
IFCA was an investment holding company with two subsidiaries: IFCA sWare focused on the group's software solutions and services, while IFCA hWare was the group's computerised business equipment solutions unit. It is not clear what happened to hWare.
IFCA sWare was formed to market and support a suite of software products from Malaysian listed company, IFCA MSC, under licence in Africa.
It is an enterprise-wide integrated business solutions provider and offers solutions for the property development and management, project management, engineering and construction, hospitality, and finance and leasing sectors.
“It has been the intention of the board to dispose of IFCA sWare and to transform IFCA from a technology provider into a high-growth business incubator,” says IFCA. The company aims to provide financial services and treasury functions to facilitate the funding and development of projects within the mining, property and construction sectors.
New subsidiaries
IFCA says it is buying Third Wave Diving and Travel for R107.5 million in cash and shares over several tranches. However, the deal is a reverse takeover and IFCA will need JSE approval to remain listed.
Third Wave owns a 20% shareholding in the Johannesburg Expo Centre (Jhb Expo). The balance of the expo centre is held by Fluxrab Investments (37.5%) and UK-based Montgomery Specialised Exhibitions (42.5%).
After the deal, Third Wave is set to buy 30% from Fluxrab and 7.5% from Montgomery for a combined total of R100 million. IFCA will lend cash to Third Wave to facilitate the deals.
Jhb Expo, established in 2002, rents company facilities at Nasrec, an exhibition centre located in the south of Johannesburg, to various exhibition, conference and event organisers. It has the rights to host the Johannesburg International Motor Show, the single largest international automotive event in southern Africa.
IFCA believes buying Third Wave is in line with its strategy of “filling the equity gap in financing so as to provide choice in the market for companies that require additional skills, infrastructure and capital for their next growth phase”.
In addition, IFCA says it will buy Australian company Out & About Marketing and Media for A$11.2 million - or about R80.4 million - from several trustees.
Out & About Marketing and Media is the “largest provider of world-class light-emitting diode digital and rotational perimeter signage in Australia”, says IFCA. It offers turnkey solutions in the national sports media arena.
The deal will diversify IFCA's asset portfolio, it says in a statement. The acquisition will be settled through a combination of cash and shares.
IFCA previously entered into an agreement to buy a stake in a junior mining company.
IFCA Tech has also had a change of ownership after Decaweb's stake in the company moved higher than 35%. Decaweb will now offer minorities 7.72c a share as part of a mandatory offer to other shareholders.
The offer is lower than IFCA's current trading prices, as stock in the company closed at 10c on Friday, a 3c or 23.08% decline on the day. IFCA will hire Charles Orbach & Company to asses whether the deal is fair.
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