Investment holding company Bidvest is set to acquire a minimum of 60% of computer services company I-Fusion. The announcement comes as I-Fusion shows operating income plummeting from R17 million to R206 614 for the year to February.
Bidvest is to acquire a majority stake in I-Fusion for a consideration of between R63.3 million and R135 million, depending on I-Fusion`s earnings and arrears.
I-Fusion shareholders are being offered either a cash upfront payment of 70 cents per share, with a further 80 cents a share contingent on I-Fusion achieving an earn out target for the 2001 period. Alternatively, shareholders can take a flat cash offer of 100 cents per share.
In addition, Bidvest will subscribe for R50 million new I-Fusion shares at 70 cents a share.
The announcement of the Bidvest acquisition comes on the back of I-Fusion`s results for the year to February 2000.
I-Fusion`s turnover increased by 20% to R150 million, but operating income fell from R17 million to R206 614. The company blames the figures on operating losses in its systems integration and Cape Town divisions, establishing command centre facility, re-branding and "general deterioration in market conditions over the Y2K period."
Headline earnings per share fell from 20.6 cents to 0.4 cents for the year under review.
Bidvest group chairman, Brian Joffe comments, "Bidvest has potentially one of the largest IT networks in South Africa. I-Fusion is one of the leading IT services companies in the country. We see the combination of Bidvest`s resources with I-Fusion`s technical capability as creating a force in the rapidly developing business-to-business e-commerce arena."
Ron Sackstein, MD of I-Fusion, views this deal as a positive one: "I-Fusion now forms part of a company that has a listed value of R16 billion. I-Fusion will give Bidvest the opportunity to create a platform and base for Bidvest`s ongoing e-commerce and Internet capabilities. Our opportunities are near limitless as the Bidvest Group of companies become I-Fusion customers."
At noon Monday, I-Fusion shares were trading at 92 cents.
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