Global automation and control company Mitsubishi Electric's purchase of a 14.9% stake in local automation software development company Adroit Technologies will bolster the latter's international sales.
Mitsubishi bought the stake in April, and the companies announced the deal last month. The partnership will focus on enterprise development within the South African economy and bolster Adroit's sales into Europe.
Adroit currently exports to 10 countries, but the deal will open new channels for it to tap into in Europe, says MD Dave Wibberley.
At the moment, Adroit generates about a third of its revenue from exports. Wibberley says the deal will bolster its revenue “significantly” and within the next five years, the local business will only contribute around 30% of turnover as international sales gain traction.
Adroit Technologies has been developing real-time software for the industrial automation and process control markets since 1992. It has completed more than 10 000 installations in over 10 countries worldwide.
Integrated solutions
Wibberley says the increase in sales will also bolster margins as Adroit has to offer “deep” discounts to move its products internationally. Adroit sells stock worth about R40 million a year.
Mitsubishi's stake in the company will also help Adroit to develop more integrated solutions, says Wibberley, as the local firm will have access to Mitsubishi's technology expertise.
As the company grows, it may look at a listing on the Johannesburg bourse, he adds.
Wibberley says Mitsubishi did not have a software partner, and its purchase of a small stake in Adroit protects its products because it now has a guaranteed software source and right of first refusal if another company tries to buy Adroit.
Hartmut Puetz, Mitsubishi's president of factory automation-European business group, says it is focused on a systems approach. “We have major expansion plans over the next five years that are not only based on hardware development. We are looking to supply fully integrated solutions, and in order to achieve this, partnering with Adroit is key.”
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