Allied Electronics (Altron) subsidiary Bytes SA has announced it is buying back 27 per cent of its stock from a consortium headed by Kagiso Strategic Investments (KSI).
KSI is indirectly owned by black economic empowerment (BEE) group Kagiso Tiso Holdings (KTH).
The transaction, which will go through on June 30, 2014, has a value of ZAR669 million (US$64.5 million).
“This transaction will be value enhancing for Altron’s shareholders, and we consider it to be an excellent allocation of capital. Bytes SA is, and has been performing well over the last few years and Altron will now own 100 per cent of its issued share capital. Similar to our recent acquisition of the minority shares of Altech, we are investing further in a business we know well and have been managing for decades,” said Robert Venter, chief executive officer (CEO) of Altron.
KSI has had non-executive representation on Bytes’ board since 2004.
“The relationship has been highly fruitful for Bytes SA and the Altron group over the years. Significant value will also be realised, through this transaction, for the broad-based black economic empowerment shareholders of KTH,” said Venter.
Bytes CEO Rob Abraham said the partnership has seen significant benefits for both organisations and has demonstrated that the principles of broad-based black economic empowerment (B-BBEE) can be applied positively.
According to Abrahams, Bytes was the first technology company in South Africa to be granted a B-BBEE certificate and has subsequently received Level 2 B-BBEE verification.
“We would never have achieved this without the assistance of our partners in KTH, not only from a shareholding perspective but also from the way in which they assisted in facilitating a positive transformation exercise,” said Abraham.
Speaking of the sale of KTH’s stakes, CEO Vuyisa Nkonyeni said: “Our exit from Bytes bears testament to KTH’s strategy of being a long-term investment partner and we have every confidence that the company will grow from strength to strength in the future.”
