Comparex Africa and Business Connexion Solution Holdings are to merge to form what has been billed as SA`s largest black-empowered ICT company, with annual revenue of more than R3 billion.
The deal, valued at R222 million, excludes Nanoteq, Perago, Mosaic, DHS and other interests within the Comparex Holdings group as well as the surplus cash reserves.
Comparex Africa CEO Peter Watt says the group has only partial shareholdings in those entities. At some stage a decision will have to be made on whether there is value in bringing them into Comparex Africa or making a distribution to shareholders.
The cash reserves have been left out of the deal because they have been earmarked for distribution to shareholders.
That will take place after a restructuring aimed at simplifying the group structure. Comparex is to apply to list Comparex Africa Group (CAG) on the JSE, after which it will unbundle its shareholding in CAG to Comparex shareholders.
Watt says the idea is to have a single quoted company with the operating companies below that, rather than the complex layered structure of the present.
The deal will ultimately see Business Connexion Investments, the current holding company of Business Connexion, own a 25.01% stake in the merged business, with CAG holding the balance.
Once the merger has been completed, Comparex Africa will consider changing its trading name and branding.
Watt will remain CEO of the newly merged company while Business Connexion CEO Benjamin Mophatlane will take up the deputy CEO post. Key Business Connexion executives will join the board and executive committee of the merged entity.
"The fit between our respective organisations is excellent," Watt says. "The new company has a strong corporate and government client base. However, there is currently limited overlap of clients, which provides the opportunity for both businesses to cross-sell into each other`s respective bases.
"Business Connexion`s market leadership in Microsoft solutions is complementary to Comparex Africa`s expertise in outsourcing, professional services, technology infrastructure and business applications."
Mophatlane says an important aspect of the merger is that it opens new career opportunities for Business Connexion staff and the chance to acquire new skills in addition to their Microsoft capabilities.
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