Adapt IT Holdings has agreed to acquire a majority stake in ITS Holdings, (ITS), a Pretoria-based specialised provider of integrated software to support the end to end administrative function within the higher and further education sectors.
Adapt IT will exchange R16-million in cash for a 51% interest in ITS, and will gain three seats on the ITS Board of Directors. Following the acquisition, ITS Holdings will operate independently to preserve its successful brand and continue to service its dedicated user community.
The acquisition will provide Adapt IT with a significantly diversified client portfolio, predominantly in the public sector, ensuring that the company's diversification risk is adequately managed. The acquisition will also assist Adapt IT in increasing the group's annuity revenue earned from the licensing and support of ITS software programs. Adapt IT and ITS have product and service offerings which are mutually complementary, increasing value for their existing and new customers.
There are strong technology synergies between the two groups, predominantly in the world class Oracle technologies, as well as synergies in domain expertise relating to financial and enterprise resource planning systems.
In addition, the acquisition will result in a significant improvement in ITS's BBBEE credentials, which will facilitate its sustainability and position it for further growth in the South African market.
Furthermore, the acquisition will strengthen Adapt IT's presence in the Gauteng market through a significant increase in the skills base available to Adapt IT in the region.
"The ITS team has built a robust and dynamic business through great leadership, strong management and great technical expertise" says Sbu Shabalala, CEO of Adapt IT Holdings. "Our companies share similar values; we both always put our customers first and are committed to innovation to improve our user experience. Together, we are natural partners as the infusion of BBBEE credibility will enable ITS to continue to gain market share in a transformed South Africa."
"We believe the deal with Adapt IT not only strengthens ITS's BBBEE credentials, but it also provides us with a valuable strategic partner. Together with Adapt IT we shall be able to leverage our position of strength in the education market to accelerate growth by gaining access to selected private sector market segments," says Derick Jordaan, CEO of ITS Holdings.
"All our customers will derive benefit from the increased resource base and complementary offerings, while the deal provides our South African client base with further visible proof of our commitment to our transformation objectives."
ITS will retain its distinct brand identity, strengthening and complementing Adapt IT's portfolio of interrelated consulting, application solution and outsourcing offerings. ITS will continue to be based in Pretoria, and all ITS employees will remain with the company.