Altech Data, a wholly owned Altech subsidiary, has acquired Labat Africa`s IT business in a R180 million deal which should boost its black empowerment credentials.
Altech says that in terms of the deal it has bought 100% of South African Micro-Electronic Systems, 51% of Labat Traffic Solutions, and 100% of Labat Africa Management Consulting.
Talks relating to the remainder of Labat Traffic`s shares are underway, and Labat Africa says that should it acquire those shares, they will also form part of the disposal.
The businesses are to be merged with Altech`s IT interests, all of which are held by Altech Data. A consortium which owns about 60% of Labat Africa is to reinvest its part of the proceeds to buy a 50.1% stake in the new merged entity.
A special purpose vehicle set up by Altech will fund the outstanding balance of R39 million.
As a result, Altech will spend a net R84 million on the acquisition, which it says creates a significant black economic empowerment controlled IT service and solutions group in which Altech has a 49.9% shareholding with board control.
Altech said at the presentation of its financial results for the year to 28 February 2002 that it had cash of R597.72 million and that it would seek out appropriate acquisitions.
Altech`s IT division accounted for 6.3% of its revenue and 7.4% of its operating income for the year. It says the Labat acquisition will significantly improve both revenue and operating income from IT activities.
Labat says it decided to dispose of its IT operations after reviewing the rationale for the company`s listing. It concluded that its market rating would not improve in the short- to medium-term as a result of current sentiment towards small to medium capitalisation companies.
The disposal will leave Labat (to be renamed Acrem Holdings) with only its retail operation, Acme Stores. It says it will consider various alternatives regarding that business and will in due course advise its shareholders of the proposed course of action, including the proposed delisting and winding up.
The Labat share, which is traded on the JSE`s venture capital market, has traded at between 15c and 40c for more than a year, although it rose significantly after a further cautionary was published on 26 April.
The share, which traded at 36c in the week before the notice, closed at 80c on Friday. It was trading at 81c late this morning.
Altech`s share was unchanged at 2 300c on the JSE late this morning.
Both companies have advised their shareholders to exercise caution in their share dealings until a further announcement is made.
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