CS Holdings (CSH) has acquired technology education company IT-IQ People Development, which is to be integrated with its CS Education Solutions division.
CS Holdings paid R6 million, after allowance for restructuring costs, for the 20% stake owned by Datatec and the 80% owned by management.
IT-IQ will add between R32 million and R40 million to CS Education Solutions` revenue annually. CS Education Solutions` revenue is already about R50m, which means the division will contribute about 33% of group revenue in the near term.
CSH`s CEO Annette van der Laan says the IT-IQ business will return to profitability immediately.
CSH will also benefit from the deal in that bringing in IT-IQ`s focus on systems technical training will see the group offer the full spectrum of IT training.
She adds that the revenue split will settle back to normal levels, with CS Education Solutions contributing about 25%, since other business areas are growing well organically.
"We would be careful not to tip the company over into the training environment because we want to remain focused on our core business," she adds.
The deal will see some rationalisation as CSH returns the company to profitability.
Both companies have nationwide training facilities and see the deal as an opportunity to consolidate and reduce costs.
Van der Laan says all six of IT-IQ`s regional training centres are being closed down, with those functions being moved to CSH.
However, she adds that the bulk of this rationalisation will be in terms of costs such as leases and other overheads. The group will attempt to redeploy staff members in other divisions.
IT-IQ MD John Ramsey is leaving IT-IQ, while IT-IQ executive director Violet van Niekerk is to join the CS Education Solutions board with sales and marketing as her chief responsibility.
"The acquisition of IT-IQ will significantly increase our annuity training revenue for the next three to four years as IT-IQ has long-term relationships with many blue-chip organisations," adds Van der Laan.
Some of IT-IQ`s clients are Standard Bank, Vodacom, Engen, Telkom, Nedcor, De Beers and First National Bank.
The acquisition, which has been cleared by all the relevant authorities and is free of suspensive conditions, takes effect on 1 February.
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