JSE-listed Pinnacle Technology Holdings has bought Precision ICT and Modrac with effect from June, for an undisclosed amount, in a bid to bolster its presence in the racking space.
Precision ICT is an engineering company focused on the design, manufacture and assembly of electronic enclosures and server racking for the ICT and other specialist markets. It makes the Modrac and Envirorac ranges of products.
CFO Chris Smyth says racking is currently a small part of Pinnacle's business, but an area into which it wants to expand as cloud is critical in the ICT space. He adds that the group already has Infrasol, which deals in the infrastructure space.
Pinnacle says Precision ICT "is the single largest manufacturer of electronic enclosures in Africa" and exports products to the UK, Middle East, Europe and Africa. Both companies operate out of a 10 000m2 factory, in Wynberg, Sandton.
CEO Arnold Fourie says the rapid global increase in cloud computing means data centres need to expand to keep up. "Data centres are at the very epicentre of the cloud," he says.
"More and more data centres need to be developed to keep up with the increase in data availability and management. The acquisition of Precision ICT and Modrac allows Pinnacle to participate in this critically important market development."
Fourie adds that incorporating Precision ICT's productive capacity into the group will add to the existing capacity of JAG Manufacturing, in which it bought a 90% stake earlier this year, and will also see the return of the Modrac and Envirorac ranges of racking products into its portfolio.
"We are confident this will allow Pinnacle to become a major player in the manufacturing and distribution of electronic enclosures and server room racking products in the country and across the continent as a whole," says Fourie. He adds that the deal is expected to contribute to Pinnacle's growth imperatives.
Pinnacle has also been expanding into areas other than ICT, as it views itself as being a specialist in distribution, and not in PCs.
Smyth says Pinnacle is still looking for more bolt-on acquisitions, although the "good stuff" comes with a hefty price tag. There are many opportunities, and the company will keep pushing for more deals, among which could be a large deal, he adds.
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