IT services and solutions group Faritec has concluded its R54 million acquisition of black-owned Enterprise Connection, in a deal set to double the JSE-listed group`s size.
After the integration of the companies, expected to be completed in June, Faritec will have a staff complement of more than 400.
The combined entity is expected to achieve revenue of more than R750 million and earnings per share of 7.4c for the year to June.
For the previous financial year, Faritec reported revenue of R434.21 million and headline earnings of 2.6c a share.
Before the acquisition, Enterprise Connection was 50.1% owned by private equity firm Canal Square, which bought its shareholding from Connection Group in the first half of 2003. That followed Connection Group`s decision to exit IT and focus exclusively on its retail operations.
Management held the balance.
Faritec first announced the deal in mid-December, although details, including the price, were withheld.
"We have traditionally focused on IBM infrastructure, business integration, service delivery competency and the provision of enterprise-level managed security," says Faritec CEO Simon Tomlinson.
"We remain committed to these areas of business while expanding our technology portfolio through this acquisition, adding a host of strategic technology partnerships to our existing agreements with IBM, SAP, Microsoft and Symantec."
The deal brings the black economic empowerment shareholding in Faritec to more than 40%. With Canal Square as a shareholder, along with the J&J Group, Faritec`s shareholder base is also further diversified.
In terms of the deal, half the acquisition will be paid for in cash while the balance will be paid through the issue of 46.6 million ordinary shares at 58c a share.
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