In a market move that promises to shake up the IT industry, South African-headquartered Pinnacle Technology Holdings (PTH), a Johannesburg Securities Exchange (JSE) listed IT company, has made an offer to purchase 100% of the shares in Axiz Technology.
CEO Arnold Fourie believes the Axiz brand is very strong in the southern African ITC market and expects good returns for shareholders on this acquisition. “Our rationale for the acquisition is the deal will improve return on equity for Pinnacle shareholders, as the purchase consideration is materially matched by the net tangible asset value of Axiz. Axiz’s expected returns for the full year will significantly outperform the finance and associated costs of the transaction,” says Fourie.
Axiz and Workgroup IT, a wholly owned subsidiary of Pinnacle, will over time, merge facilities, operations and eventually systems to leverage off a combined infrastructure. This combination will facilitate growth in distribution volume as new brands and brand segments are made available to the extended customer base.
The acquisition will contribute to the group’s growth and broaden its technology offering.
So says Workgroup MD Doug Woolley, who adds that, by leveraging a common infrastructure, Workgroup will escalate its product offering into new markets, while Axiz will benefit from the increased solutions expertise, thereby driving new opportunities for its vendors and reseller partners.
“Both the Workgroup and Axiz brands are well respected in the market and the two companies have a very close cultural fit,” says Woolley.
He says over time increased collaboration and consolidation can be expected, while increased profitability and growth will be driven by the leveraging of:
* Increased product offering;
* Increased customer reach;
* Increased geographical presence both locally and throughout Africa;
* A common logistics and warehousing infrastructure; and
* Common back office systems.
Craig Brunsden, Chief Marketing Officer of Axiz, says the combined solutions offering will enable both companies to take advantage of converged IT infrastructure and cloud computing, bringing new opportunities to the vendor and reseller partners of both companies.
“PTH, Workgroup and Axiz are recognised for having evolved and grown with the IT industry over the years and an acquisition of this kind seemed the natural next step in our joint evolution going forward,” says Brunsden. “By combining the passion, creativity and broad range of vendor solutions of both companies, we believe we will continue to drive innovations that help people and organisations everywhere do business better.”
The transaction is subject to Competition Commission approval.
