J&J Group says Faritec, its flagship ICT investment, could be a vehicle for further acquisitions.
CEO Jayendra Naidoo says J&J, which he founded with Jay Naidoo in 2000, is an active shareholder in the companies in which it invests.
"We`re an operational partner with our other partners in the companies that we are involved with, and we are building up the investments that we`re in, and the group as a whole, to the point where we think there will be several listable entities or listed entities that are major players in their sector," he says.
J&J is invested mainly in four sectors: ICT, financial services, industrial and health.
J&J acquired 30% of Faritec in April 2003 and recently bought an additional 7.1 million Faritec shares - representing a shareholding of more than 5% - in the open market.
Naidoo says the group sees Faritec as its flagship investment in the ICT sector.
"On a willing buyer/willing seller basis, we see that as time passes it would make sense to consolidate all those businesses that can be a coherent entity," he adds. "In general we are working towards larger, well managed, more compelling enterprises."
However, any such plan would have to take into account such factors as synergy, the capacity to manage a merger, and the will of shareholders.
"We would like to have fewer points of contact."
He adds that the group sees Faritec as a vehicle through which acquisitions can be made, although it would be careful not to invest in businesses which are "in conflict" with its existing investments.
Faritec is expected to release its latest full-year results in early September. For the six months to December, it achieved an attributable profit of R4.65 million on turnover of R204.35 million.
The profit represented a turnaround for Faritec, which for the year to June 2004 incurred an attributable loss of R11.56 million on turnover of R329.98 million.
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