Business Connexion has announced it has received unconditional Competition Commission and Shareholder approval for its acquisition of selected business units of the listed IT company UCS.
This development is a step forward in the company's goal of cementing its position as a dominant provider of information and communication technology services and solutions to the retail industry. The transaction will become effective once the sale shares have been issued and allocated to UCS, which is anticipated to be before 5 May 2011, says Business Connexion CEO Benjamin Mophatlane.
“Shareholders of UCS and Business Connexion voted overwhelmingly in favour of the transaction on 31 March 2011; Competition Commission approval was previously secured, paving the way for the conclusion of the deal,” he says.
First announced in December 2010, the transaction sees Business Connexion acquire selected UCS assets for R614 million, making it the largest acquisition the Group has made. Financing of the deal is primarily through the issue of 101 234 118 ordinary shares and 25 033 334 ordinary “A” shares in the share capital of Business Connexion, with the balance of R30 million to be paid in cash on the achievement of profit warranties.
The UCS businesses, which will become a part of the enlarged Business Connexion Group, are UCS Technology Services, UCS Solutions, CEB Maintenance, Destiny E-Commerce and Accsys. The addition of over 1 500 skilled IT employees to the Business Connexion Group will undoubtedly position the Business Connexion Group as the largest locally owned IT employer in South Africa, with over 5 500 employees.
Now that the acquisition is in effect fait accompli, Mophatlane says planning the integration of the UCS entities into Business Connexion Group can proceed with earnest.
The acquisition fulfils a key strategic intention for the company. “Our growth strategy is focused on enhancing our leadership position in the market while enhancing our range of solutions to our clients.
“The combination of UCS's end-to-end retail technology and application solutions with existing service offerings within the Business Connexion group is a significant step forward in accomplishing this strategy,” he explains.
Mophatlane particularly acknowledges the strength of the UCS leadership team. “We are excited about the depth of leadership and entrepreneurial talent that the team brings to Business Connexion.
“We commit our full support to enable UCS management teams to maintain their focus on business by minimising unnecessary disruption of integration processes. We envisage that the acquired companies will continue to operate as separate businesses. This also makes it easier to manage our strategic acquisition goals because they are each responsible to achieve specific profit warranties.”
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