Square One Solutions Group Ltd, listed on the JSE Securities Exchange in 2000, has concluded a black partnership agreement that gives Utho Technologies (Pty) Ltd (Utho Tech) an effective 56.4% controlling interest.
Square One CEO Trevor James says the deal has two components - firstly Square One's acquisition of the Utho Tech business, effective from 1 January 2004 and settled by the issue of 7 million new shares; and secondly a sale of shares by major Square One shareholders to give Utho Tech the controlling interest.
The Square One acquisition of Utho Tech is worth R4.9 million on the basis of 7 million new shares at 70c a share and takes the number of Square One shares in issue to 29 million.
To facilitate Utho Tech's controlling interest, James and another Square One executive director, Garth Coetser, have agreed to arrange for the sale of 9 361 901 shares (comprising 32.3% of Square One's issued share capital after the issue of the abovementioned 7 million shares), and valued at R6.5 million, to CCG182 Investments (Pty) Limited, a wholly-owned subsidiary of Utho Tech.
Utho Tech is a 50% held subsidiary of Utho Investment Holding (Pty) Ltd (Utho) a holding company with interests in IT and corporate advisory services. The remaining shareholders in Utho Tech are individual black IT professionals. Utho Tech is 100% owned directly and indirectly by several black shareholders.
"Square One has for some time been attempting to find an appropriate black partner that can assist in appropriately positioning the company to take advantage of the significant business opportunities that are afforded to empowered companies," says James.
"This deal adds additional value to our customers, and across all the operations the business of Utho Tech is entirely complementary. Utho Tech brings skills and services in high-end enterprise system integration and application development as well as in networking which, with our focus on the SME and enterprise markets, gives us the ability to provide our customers with substantive solutions and services.
"It looks after the interests of minority shareholders by opening up new market opportunities for Square One and creates a genuine black partnership. There is no duplication of resources so no rationalisation or retrenchments are necessary. In fact, the infusion of new skilled professionals will contribute towards securing a sustainable, long-term future for the business."
James adds that the expanded group will specialise in providing the market with niche business and vertical technology solutions that include authentication systems, social services, product coding and marking solutions, application and systems integration services and telecommunications and service provider solutions.
"These business-enabling solutions will be supported by our ability to provide horizontal infrastructure solutions for networking, processing and storage, infrastructure integration, power solutions and security with biometric authentication and verification technology.
"I believe we are now unique in the market with our focus on vertical and horizontal market segments and underlying technology. We have a combination of business knowledge, IT skills, technological capability and a track record in channel management and professional services that gives us a distinct advantage for the delivery of customised, turnkey business enabling solutions."
The acquisition is subject to approval by the Securities Regulation Panel, the JSE Securities Exchange, the Competition Commission and Square One shareholders. Since the transaction results in Utho Tech becoming the new controlling shareholder of the company, a general meeting of Square One minority shareholders will be held to consider and approve the waiving of the requirement for Utho Tech to make a mandatory offer to minority shareholders.
Share
The Square One Solutions Group focuses on providing IT-based business enabling solutions. The company has national representation and more than 18 years of experience of the South African market. Square One offers value-based solutions centred around biometric authentication; integrated wireless and mobile applications; enterprise storage and backup/recovery; enterprise power; coding and marking; and enterprise LAN, WAN and infrastructure for the corporate, SME and government markets. The company also distributes document solutions, colour input and output devices and provides 24x7 national support and service.
Utho Technologies
Utho Technologies (Pty) Ltd is a subsidiary of Utho Investment Holdings (Pty) Ltd, a private holding company formed in 1997 that operates in the financial services and information technology sectors. Utho Tech provides a wide range of IT solutions and services from Web design and development to systems integration, application developments, as well as network integration and has major clients predominantly in the financial services sector, including commercial banks, merchant banks and insurers.