UK-based software group Integrity Software has taken a substantial stake in JSE-listed Planit Technology Holdings as part of an acquisition strategy involving two of Planit`s non-core subsidiaries, HKC and Billcost. The deal gives Integrity an 18% stake in Planit.
"This deal not only brings in the order of R10 million to the Planit stable over the next 12 months, but also triggers the participation of a local institution to the tune of a further R9 million," says Dale Packham, CEO and MD of Planit. "This relieves Planit of all past and present debt obligations and sets it firmly on the road to organic recovery."
Restated Planit results released two weeks ago show a R163.4 million loss for the year to February 2000, despite a R39.6 million turnover. There was an operating loss of R26.8 million for the year and a headline loss of 5.8c per share.
The new Planit board appointed in April completed a due diligence on the company, which resulted in multiple write-offs on failed deals negotiated during the year. This meant an exceptional items figure of R139 million on the income statement.
Integrity Software is established in selected vertical markets in the UK, Ireland and SA, and has a range of proprietary software technology that is effective in both "scaled down" operations and large corporate applications.
The group also has an established Internet and e-commerce focus which supplies corporate customers with fully integrated mission-critical systems.
Planit`s board sees this deal as extremely strategic for Planit as it brings about synergy that will see the two groups working closely together in the future.
Planit says its thin-client Internet-based business-to-business technology has already proven successful in its chosen vertical markets, and notes that the integration of methodologies and technology will serve both groups extremely well.
The Planit board says the UK market has expressed keen interest in two of its existing products, and Integrity could play a crucial role in assisting with the implementation of these products in the UK and Ireland.
"Planit is in final discussions with two strategic acquisitions, which will bring about further critical capabilities in our core-focus environment, and also add considerably to the group`s bottom line," says Packham. "Acquisitions will be funded partly in cash but mostly in Planit script (at no less than 30c per share) and anticipated profits will be warranted."
An announcement regarding these acquisitions and other developments is expected soon.
Markets reacted favourably to the news and the share price climbed 1c or 14.3% to trade at 8c by 10.30am today.
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