Identity management company Ideco, which is to list on the JSE`s AltX on 30 October, plans to make acquisitions that will move the company into sectors where it does not already have a footprint.
Executive chairman Vhonani Mufamadi says the company, the exclusive distributor of Sagem biometrics products in SA, has already identified "exciting" acquisition targets that will allow it to expand its operations into complementary markets.
"They are not necessarily competitors," he says, although he cannot yet disclose in which sectors the targeted companies are operating.
"There are players there who have not been in the biometrics field, but who have been offering solutions to their clients to manage this business risk to do with identities, fraud and so on.
"We don`t wish to go in there and reinvent the wheel. We see some very well entrenched players in those markets with very good solutions - people who understand those markets - and we want to team up with them and further enhance the security profiles of their solutions."
Ideco`s customers have traditionally been public service entities, including the Department of Home Affairs and the South African Police Service, but the company has also moved heavily into the private sector.
Rapid growth
Ideco achieved revenue of R209.47 million for the year to 28 February, an increase of almost 20% from the R174.7 million of the previous year.
It recorded a 31% increase in after-tax profit, from R16.91 million to R22.21 million, in the same period.
At the end of February, the group had cash of R26.18 million on its balance sheet and recorded a current ratio of 1.3 (meaning its short-term assets could be used to settle its short-term debts 1.3 times).
The balance sheet also showed total assets of R55.69 million against total liabilities of R39.1 million.
The group has four operating companies: Ideco AFISwitch, which provides automated criminal background checks to the private sector; Ideco Biometrix and Ideco Technologies, which handle mainly government tenders, but also offer a range of biometric products and services to other sectors; and IBSS, specialising in fingerprint biometric access control.
Funding the group`s acquisition strategy is part of the reason for listing, Mufamadi says. "The funds that we are raising with the listing will not be sitting in our bank account - not for too long." However, he adds that with the market for identity management growing at a rapid rate, "if we didn`t do one outside investment/acquisition, the organic growth alone is absolutely phenomenal".
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