AYO Technology, previously Sekunjalo Technology Solutions, has entered into a binding offer to acquire a controlling interest in Sizwe Africa IT.
AYO Technology has entered into an agreement with Loxisource and Alexisource, to acquire 55% of the share capital of Zaloserve from Loxisource and Rev Vukile Mahana. Zaloserve is an investment holding company that holds a 100% shareholding in Opiwize, which in turn holds a 100% shareholding in Sizwe.
The purchase price for the 55% interest in Zaloserve is R165 million, based on an equity value of R300 million for Zaloserve.
A payment of 90% of the purchase price will be settled upfront with the balance being settled upon the achievement of warranted profits for a 3-year period, AYO said.
Sizwe offers various information and communication technology (ICT) services to its customers, including a focused spectrum of physical infrastructure, metro and long-distance optic fibre, facility management, continuous energy supply, networking and security to hosting, storage server processing, mobility, data centre, end-user computing and associated consumables.
It operates in three concentrated business units, namely managed services; unified network solutions and fibre & facilities management that service and have long standing relationships with both public and private sector companies.
“Sizwe has a broad base of public sector customers and blue chip private customers and has a strong annuity based income. In the year ending 30 June 2018, Sizwe had revenues in excess of R1 billion, strong cash generation with cash from operations of R75 million and EBITDA of R70 million,” AYO said by way of a rationale for the proposed acquisition.
“Additionally, the acquisition allows AYO to expand its product basket and client offering as Sizwe will be one of AYO’s key platform providers.”