Mustek Limited, South Africa`s largest assembler and distributor of personal computers, has acquired a 50% stake in Diamond Network Technologies (DNT) for an undisclosed sum.
Established in 1988 and based in Pretoria, DNT is South Africa`s foremost software developer in security and remote management products. Among DNT`s registered trademarks are Di-NIC, ViruGuard, FlashFloppy and Micro-PLC, which have dominated locally and made impact internationally. Consignments of all DNT`s products are exported, notably ViruGuard, which has been marketed very successfully abroad under the French brand name of AvenGarde.
David Kan, Chief Executive of Mustek, said the 50% equity stake in DNT is expected to enhance Mustek`s earnings over the next two years, particularly by virtue of DNT`s in-house developed Y2K card which is currently being marketed globally.
`The partnership with DNT gives Mustek access to an in-house research and development facility which will enable us to add value to our product range. In addition, DNT is currently involved in negotiations abroad to enter into OEM agreements with overseas manufacturers regarding its core product of Di-NIC software. This will improve DNT`s earnings significantly in the future`, said Kan.
DNT`s products have captured the lion`s share of the hardware pre-boot management and security market in South Africa with ViruGuard and Di-NIC, previously known as ScudNet. Its product range consistently features in the SA government term contracts and has become a standard installation for many large institutions. Among DNT`s more recent product developments are a world-patented, remote-accessing diagnostic card as well as a Y2K card which solves the year 2000 compatibility problems for most dated computers.
Ricus Ellis, Managing Director of DNT, said the partnership with Mustek will significantly expand the market exposure of DNT`s products. `Our strength has consistently been in the research and development of core technology. Mustek, on the other hand, through its expertise and extensive distribution channel, has no peer in South Africa as a marketer of computer products and I foresee substantial growth prospects for both organisations`, said Ellis.
He pointed out that DNT had demonstrated its ability to develop high-quality products quickly, thereby capitalising on market opportunities. `A good example is the Y2K card, which is being manufactured by Mustek. The product was developed and packaged within the span of two months and we realistically expect to sell one million units during the course of this year`, said Ellis.
Mustek reported 40% growth in headline earnings per share in its interim results, released earlier this month. The Mustek share price has shown a strong recovery from a low of 600 cents following the market decline six months ago and is currently trading at 1060 cents.
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