Altech Technologies Ltd. has entered into a major Black Economic Empowerment (BEE) deal, involving its ICT division, whereby the companies within that division have been restructured under a sub-holding company, Altech Data, and in which an effective 25.01 percent shareholding will be acquired by Pamodzi Investment Holdings, the companies announced Tuesday.
Altech Data, with a historic annual revenue of approximately R250 million (US$36 million), incorporates Isis Telecommunications, a software house and systems integrator in the telecommunications industry, Altech Informatics, which provides operational management systems and total system integration, and Altech Card Solutions, comprising Smart Card Technologies, Datacard, Cardtronic, the card personalization business of Africard, and Integrated Payment Solutions, a newly acquired transaction switching business.
The deal, subject to conditions precedent, excludes the business of NamITech which is directly held by Altech, and in which Pamodzi is already an effective 28 percent equity shareholder.
Altech, a member of the Altron group, is a R4 billion turnover JSE Securities Exchange-listed group involved in the convergence of telecommunications, multimedia and information technology (TMT). Pamodzi is a black-controlled investment holding company, which was formed in 1996 by black entrepreneurs, professionals and business people.
Altech CEO, Craig Venter, says the group's commitment to BEE was clearly reflected in the deal. "As I welcome Pamodzi into Altech Data I must immediately report that our dealings with Pamodzi, through NamITech, have already proved of immense value to the group, and I have no doubt that this latest venture will be a win-win situation for all concerned."
Venter adds that the transaction, for which binding heads of agreement have already been signed, will bring the full benefits of BEE participation to Altech Data. "I already know from our relationship with Pamodzi that the group will not be content to be a passive partner, which provides little input," continues Venter. "Since its incorporation, Pamodzi has established an impressive track record through its ability to source value creating transactions, thereby actively adding value to all its investments."
He says that while the transaction would result in Altech Data and the entire Altech group being more competitive in its markets, it would also, just as importantly, enhance Altech's progression in achieving its stated BEE objectives.
"This empowerment deal comes shortly after two earlier BEE deals announced by Altech within the last few months," says Venter. "The first being the acquisition by the Motoma ICT Group of a 30 percent interest in Altech's two-way radio systems business, now renamed Alcom Matomo. The second deal being associated with Pamodzi and Altech's recent acquisition of a controlling shareholding in NamITech." He says Altech pioneered in this context an innovative scheme designed to give Pamodzi an effective 28 percent shareholding in NamITech, whilst avoiding the debt structure traditionally associated with such BEE transactions.
"Pamodzi's further acquisition of an effective interest of 25.01 percent in Altech Data follows a similar structure, using a preferred ordinary share structure," he adds.
The CEO of Pamodzi Investment Holdings, Ndaba Ntsele, says that, after working closely with Altech during the NamITech acquisition, he has seen, firsthand, Altech's commitment to the empowerment of previously disadvantaged individuals. "As such, Pamodzi is extremely proud to further its association with the Altech group through the acquisition of a preferred equity interest in Altech Data," he concludes.