MB Technologies (MBT) is offering R85 million to buy out JSE-listed SecureData, as it seeks to sharpen its security focus.
The deal, which is subject to conditions, will see SecureData delist from the JSE and become a standalone unit within MBT, which is one of SA's largest unlisted IT companies. So far, shareholders holding 80.6% of SecureData's stock have agreed to vote in favour of the deal.
In an announcement to shareholders, the companies say the deal will create a "more efficient organisation with increased diversification". MBT also believes there are cross-selling opportunities across each company's client base.
The bid also offers shareholders an opportunity to exit SecureData for cash, notes the statement. MBT is offering shareholders 38c for each share they hold, which values the deal at around R35 million when treasury shares are excluded.
SecureData's total market capitalisation is R88.7 million as its stock closed at 36c last night, a 2.86% gain on the day.
Room to grow
SecureData CEO Miles Crisp says being brought into MBT's fold will give SecureData more scale as MBT provides it with more distribution points around SA. In addition, SecureData will aid MBT in growing its presence in Africa, he adds.
SecureData will remain a separate unit within MBT, but will share facilities where it makes sense, says Crisp. He notes MBT did not have a specialised security focus, a situation it can remedy by buying SecureData.
"MB Tech recognises the strengths of SecureData in its chosen fields and wishes to work collaboratively with its existing management team to leverage off their experience, skill set and networks," says the statement.
SecureData will now also have the backing and breathing space to accelerate its strategy and expansion into Africa, says Crisp. He explains the market would have punished it if its African rollout led to losses. "We needed a big brother."
The listed company has recently been restructured and has sold its SensePost unit for R36 million, leaving it with its loss-making African entity. In the year to July, a period that included SensePost, its made a modest profit of R2.38 million, compared with its net loss last year of R38 million. Revenue also improved, growing from R222 million to R289.7 million.
SecureData believes growth opportunities will come from its African operation, which provides the bulk of its revenue.
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