Software solutions and outsourcing services group UCS is to buy Affinity Logic from Datatec and other shareholders in a deal worth R41.7 million.
Datatec, which currently owns 55% of Affinity, says the disposal is in line with its previously stated aim to focus on its core businesses. Datatec bought an initial 47.5% stake in Affinity in September 1998 for R175 million.
Other Affinity shareholders include Massmart Holdings, certain Affinity management members and the Affinity staff share trust.
UCS will pay the vendors R35.24 million in cash and a further R6.46 million by the issue of new UCS shares at 60c each. Affinity management has also been offered five million UCS shares at 60c each subject to regulatory and shareholder approval.
Datatec`s share of the proceeds is 19.3 million in cash.
UCS provides software and associated implementation and support services to the retail sector, while Affinity provides a range of outsourced services to certain large South African retailers and suppliers to retail.
"Affinity has built a sophisticated infrastructure for service delivery and management," says UCS CEO John Bright. "This acquisition will allow us to leverage the Affinity business to offer an increased product range and scope of services to our software customers.
"Additionally, it will enhance the ability of the enlarged group to compete for large-scale outsource contracts in the future."
Affinity MD Richard Newton says being part of the UCS Group will give Affinity access to a range of solutions and services that complements its own offering.
The deal is subject to regulatory and UCS shareholder approval, as well as the settlement by Affinity of the vendors` loan accounts, for R68.85 million.
Bright says irrevocable undertakings to vote in favour of the acquisition have been obtained from the holders of 51% of UCS`s shares.
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