Itec, southern Africa’s third largest office automation company, has completed the first step of its international expansion strategy by acquiring a significant share in two independent UK companies, Portrayal and Peninsula Business Systems.
The subsequent merging of these two entities, the company says, forms a new dominant partner in the region that is well placed for further expansion into London and south Wales.
Portrayal and Peninsula will be merged by April 2010, creating the largest independent office automation supplier in the region. Itec Group CEO Philip Perkins will be a non-executive director on the board of the merged company, to be called Portrayal.
“Creating and holding significant shares in this new company represents several advantages for Itec, not least the opportunity to immediately dominate a region in a sophisticated market such as the United Kingdom,” Perkins says. “In addition, the fact that both of the original businesses have customer bases in other parts of the UK enhances our overall expansion strategy from the outset. The package couldn’t have been better from our point of view given the commercial and strategic benefits of Portrayal and Peninsula. Similarly, they saw the growth potential for themselves through association with Itec and our group’s skill set.”
Mike French, CEO of Portrayal adds: “When I was first approached with a plan to combine the businesses of Portrayal and Peninsula, I was very excited by the prospect of creating the largest independent dealership in the South West. I am delighted that Itec has joined us in this project and have invested significantly. Their experience and management expertise will assist us greatly in achieving our goals in further development and expansion of the business.”
Perkins says that the deal enables integration of products and service delivery across both markets and leveraging this will provide both the South African and UK businesses with generous cost savings. “In addition, there will be knowledge transfer between the UK and South Africa," he says. "We are expecting to be able to enhance operational efficiencies and competence as well as increase the sophistication of products, solutions and service delivery across both markets.”
Itec has been planning to expand internationally for some three years, he adds, with focused research into preferred markets taking place during the past 12 months. “The UK market is one of the easier markets for us to expand into; trading practices, travel links, culture and the similar time zones are complementary. Also, the market operates in very similar ways to ours,” Perkins says. “So when it became clear that Portrayal and Peninsula were open to the idea of a merger and we saw just how dynamic the management teams were, we jumped at the chance to buy in.”
Itec UK has established a head office in London from which it will explore further international opportunities. The office will be staffed largely by employees of the South African Itec business because, Perkins says, “they are culturally aligned with the way we run Itec, particularly in respect of the time and effort we spend not only on acquiring dealerships such as Portrayal and Peninsula, but also in ensuring that they succeed by adding value to them, our partners and clients. We hope that additional cross-skilling for our staff in the best practises of both markets will have extended spin offs for everyone both here and in the UK.”