DVT, the software company listed on the JSE's Alt-X, has acquired 66,7% of local content management developer Offline Digital for R1,4-million in cash.
The acquisition is in line with DVT's strategy of acquiring niche software companies which have developed their own IP.
DVT has an option to acquire the remaining shares within two years.
Offline Digital is a specialist development company that develops and implements solutions for content management. These solutions enable multiple format publishing of personalised, high-value content suitable for distribution over a range of channels.
"We are excited about the potential Offline Digital brings to DVT," says CEO Chris Wilkins. "The company's offerings are needed by every company in the market, no matter how large or small, as everyone needs content management solutions. With more than 20 customers in South Africa, the UK and the European Union, Offline Digital is at the very beginning of its growth curve. We expect the company to grow more rapidly as part of a larger, listed group with a national footprint."
Offline Digital MD Ryan Morison adds: "This transaction will accelerate our growth, ensure we are BEE-compliant and reduce our funding requirements.
"We already conduct the bulk of our business in Gauteng. As part of DVT, we will find it far easier to sell to and support Gauteng-based clients, and enjoy the benefits of economies of scale and shared infrastructure, and of being part of a listed entity.
"In addition, there is much we can learn from them because of their experience in the market in general and in selling their own IP in particular."
Founded in 2003, Offline Digital attained Top Technology 100 status in 2003, 2004 and 2005. The company is characterised by its innovation and entrepreneurship, attributes it shares with DVT.
"Our companies have a good cultural fit," says Wilkins. "We have in effect bought out silent shareholders, leaving the core management team in place. The acquisition deepens our content management capability, and grants Offline Digital access to our much larger customer base.
"We will also have a significant competitive advantage over other content management companies, as Offline Digital's software is locally developed and therefore very competitively priced."
The impact of the transaction on DVT's financials is earnings-enhancing, adds Wilkins.