All conditions for the sale of its enterprise solutions business division, to UK-based SAP specialist Axon, have been met, says listed software company UCS.
Last month, UCS said it was selling the unit for a maximum of R125.26 million. It noted that the deal would allow it to grow its UCS Solutions' managed services division to boost annuity-based revenue, as well as expand into other territories.
Deputy CEO Dean Sparrow explained that the company, which provides software, solutions and services, would benefit from supplying maintenance to the unit after it is sold, which would also give it access to the international projects that Axon takes on.
The business is being sold to Axon division HCL Axon, with effect from August. The sale of the unit is as a going concern, which means the 70 staff members will retain their jobs.
UCS will receive R57.1 million upfront and, based on revenue targets, will receive a maximum of R125.26 million.
The revenue from the sale will partially be used to meet its current and future obligations, and may also be used for acquisitive and organic growth, the company says.
Despite the short-term profit windfall, which is expected to bolster earnings per share by over 9 000%, the company expects to gain annuity-based revenue from providing ongoing support, hosting and outsourcing to Axon's retail SAP clients.
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