Spescom is to acquire a controlling stake in US-based Altris Software, a knowledge management developer. The deal, which will cost Spescom just under R65 million, will also give it full ownership of Altris UK.
Spescom acquired 60% of the UK subsidiary and 17% of the parent in May last year, for a consideration of $4 million. At the time Altris was embroiled in accusations of falsifying financial statements. Shareholders in the Nasdaq-listed company asserted that Altris operated a "fraudulent scheme of and course of business that operated as a fraud and deceit on purchasers of Altris stock" in a class action lawsuit. Shortly before Spescom acquired its stake, an agreement was reached that would settle all claims for $4.2 million.
With that agreement now ratified by the courts, Spescom has moved in to take control of the company. It will increase its stake of 17% to 58% and place two representatives on the Altris board. The purchase will be concluded with R23 million in working capital and R40 million in secured debentures and preference shares, which will be acquired from a venture capital company in a separate transaction.
In return, Altris US will transfer its remaining 40% of the UK subsidiary to Spescom. Altris UK is then to become Spescom UK.
"We did this deal at precisely the right time," says Spescom chairman Tony Farah. He believes that Altris could reach a market capitalisation of $100 million. According to Spescom, the average cost of its shares will be less than 70c and shares are presently trading over the counter for $2. The company's Nasdaq listing was suspended due to the shareholders' action. Spescom says it intends to restore that listing.
At the time of the acquisition of the original stake, Spescom group chief executive Peter Verwer told ITWeb that buying into the American parent was not the intent. "It was the way the deal was structured," he said, admitting that the embattled company was desperate for a buyer.
But even though unplanned, the stake is nonetheless welcome. "The US purchase is important because the market is growing at 40% per annum," says Farah. "It will help us achieve our target of increasing offshore components of earnings to 50% by the next few years."
Spescom and Altris are to integrate their knowledge management systems, a process started seven months ago. At the same time Altris is involved in an application service provider model for document management. Its DocDepo.com Web site was launched in December, and is to provide access to documents within e-commerce applications.
Related stories:
Spescom makes long-awaited acquisition
Spescom adds dollars to pounds
Share
