Volaris takeover won’t stop Adapt IT acquisitive strategy, says CEO
Specialised software solutions provider Adapt IT, which is set to be taken over by Canadian-based Volaris Group, will continue with its acquisition strategy after the buyout.
So said Tiffany Dunsdon, Adapt IT CEO, yesterday in an interview after the company announced its financial results for the year ended 30 June.
According to Dunsdon, who is based in Australia, the Volaris takeover deal is expected to be concluded in early December after getting all the regulatory approvals.
Over the past months, Adapt IT has hogged the limelight as Volaris and JSE-listed Huge Group engaged in a tug of war to get control of the specialised software solutions provider.
Dunsdon recently replaced Adapt IT founder Sbu Shabalala as CEO after he resigned from the company following controversial circumstances in his personal life.
Asked about her immediate goals in the new role, she said: “We have a clear strategy that we have been pursuing for a long time as a specialised software and digitally-led group, which is based on growing the business organically as well as acquisitively.
“We are ready now to continue our acquisition strategy. But in essence, we provide mission-critical software to customers across vertical markets. So, we intend to continue doing that, and I think the advent of the pandemic has focused the demands of the executives on the importance of digital platforms for doing their business.”
She noted customers have been cautious in the pandemic during the past 18 months with regards to conserving their cash and delaying some projects.
“But as we get to a point where we know that we have to live with this virus and we know that we won’t be going through repeated lockdowns, customers want to resume their business operations and want to upgrade their solutions; we are ready for them.
“We believe there is going to be strong demand for our services into the future. The fact that demand for digital services has been accelerated will bring opportunities for us.”
Dunsdon does not believe Adapt IT’s acquisition strategy will be impacted with Volaris now controlling the company.
“We have been in the South African market for a long time and we are well-known for what we do and we have stated our acquisitive strategy for many years. The company that is looking to gain control of Adapt IT comes from a listed acquisitive group in Toronto and I think that software companies will be very much aware of them.
“So, I am sure lots of software companies will be willing to join us in due course. We also hope that our name and brand is now well-established in the market.”
Speaking about the takeover bid and the recent leadership changes, she said: “We have got quite a good management depth and we are in the process of engaging with Volaris. As part of the Volaris due diligence, they have been exposed to a number of our senior executives and the Volaris team was quite comfortable with the management depth at Adapt IT.
“That set us in good stead with Volaris – looking at the situation that had transpired and deciding to continue with the desire to invest in Adapt IT.”
Dunsdon explained there was a shareholder meeting on 30 June and 87% of the shareholders voted in favour of the Volaris transaction.
“So, we are now in the process of getting regulatory approvals from competition commissions in five African countries – South African being the main one – as well as fulfilling a handful of conditions for the deal. So it’s really very much on track and the deal should be finalised by early December.”
Throwing in the towel
She pointed out that Huge Group’s acquisition bid ended in July when it got 1.9% take-up of its offer and subsequently sold its Adapt IT shares.
“The Huge Group offer was unsolicited; it wasn’t in consultation with Adapt IT; it was an all-share offer with an exchange offer between Huge Group shares and Adapt IT shares,” Dunsdon said.
“The Volaris offer was an all-cash offer at R7 a share with the option to stay in the private company with Volaris. So they were very distinctively different deals and, of course, we had an independent expert to value both offers and give that independent value range to our shareholders.
“So I think our shareholders made their decision resoundingly clear with a less that 2% take-up on the Huge offer and 87% on the Volaris offer.”
According to Dunsdon, if certain conditions are met, Adapt IT will be delisted from the Johannesburg Stock Exchange after the Volaris takeover.