Xantium Technology Holdings has further boosted its Oracle solutions capability with the acquisition of ITQ for up to R40 million. ITQ's established private sector client base, including Medscheme, De Beers and Unitrans, complements the government portfolio of Waymark Consulting, another Oracle solutions specialist purchased by the group in March.
The consideration will be paid partly in cash with the balance to be settled by the issue of shares over the three-year warranty period. The upfront cash payment of R6.5 million will be accompanied by an issue of shares at 53c a share, worth R2.5 million.
James Murray, CEO of Xantium Technology Holdings, says ITQ's strong annuity revenue streams will further underpin the group's sustainability.
MD of ITQ Marc Schrader says: "Integration into Xantium will not only boost our BEE credentials but also enable us to leverage off the group's highly-regarded expertise in the government sector."
ITQ's Oracle capability enables the company to offer custom-made fleet management and leasing solutions as well as business intelligence and data warehousing services.
Since listing on AltX, Xantium has been on a steady acquisition trail starting with plastic card and barcoding expert Spec Systems in September 2004, followed by Waymark Consulting, niche systems training operator Foster-Melliar and most recently the double acquisition of management consultancy Simeka Consulting and infrastructure manager Sifikile Procurement Services.
Murray says: "Each of the acquisitions has been evaluated for some time to fulfil a defined strategic role that will enable Xantium to achieve its vision of a specialised IT services group."
Murray emphasises that the acquisitions have been intentionally concluded around the same time to enable the new companies to trade as an integrated group for the full 12 months of Xantium's new financial year, starting in June.
He points out that although Xantium is young, its key management each have between 15 and 20 years' industry experience. "Management has witnessed the failure of IT groups that boosted critical mass quickly through acquisitions. We've learned from their mistake of not anticipating the integration phase, and have avoided this by devising a clear integration strategy in advance of concluding the acquisitions." He says further that the existing flat management structure will help facilitate the smooth integration of the various management teams.
As with all the acquisitions, key management have signed service agreements with the group and have for no additional compensation undertaken restraints of trade.
Looking ahead, Murray says the group's short- to medium-term focus will be on consolidation and continued organic growth. However, he points out: "Xantium will remain opportunistic in respect of acquisitive growth, and will buy businesses that make sense for the group."
The acquisition of ITQ remains subject to due diligence of ITQ and approvals by the parties with whom ITQ is currently contracted and by Xantium's board.
Xantium's shares closed Friday up at 60c a share.
Share
Editorial contacts