Telemasters has announced the first in a series of acquisitions, acquiring 100% of Motion Telecommunications' least-cost routing (LCR) business for an undisclosed amount in cash. The company retains its cautionary status and expects to announce additional acquisitions soon.
TeleMasters anticipates that the transaction, which will add about 10% to its existing client base, will increase its revenue by R1,4-million and contribute an additional R1,1-million profit (after tax) per annum. No shares will be issued for the transaction.
“Our growth strategy includes organic growth, strategic acquisitions to leverage this growth – by growing our dealer partner base – extending and broadening our service offering and diversifying revenue sources,” says Mario Pretorius, CEO of TeleMasters. “We are fortunate to have a no-risk, results guaranteed offering – working off this base our planned acquisitions should significantly increase our overall service to the market.”
TeleMasters uses a savings guarantee to drive client attraction and loyalty.
“Our aim is achieving 99% uptime for clients. With our focus on technical expertise, we feel this is within reach,” says Pretorius. “In an economy where growth is slowing, customers are more aware of the potential of services that guarantee them savings and service levels, which is good for our general market presence.”
TeleMasters began 2008 with two record-beating sales months and has also increased its channel to market, through agency partners, by 30%.
“We are growing a very strong sales team which is performing above expectations which has good revenue implications,” says Pretorius. “In addition, we're also actively engaged in acquiring more quality bases similar to that of Motion Telecommunication.”
With strong positive cash flows and almost zero debt, TeleMasters is well placed to take advantage of more acquisition opportunities. Pretorius is confident that the company will sustain its stated 40% dividend payout policy.