Mark Davison reports – Following months of speculation in the IT channel, South Africa’s largest distribution group, Alviva, has confirmed that it is in negotiations to acquire the country’s second biggest distributor by revenue, Tarsus Technology Group.
Late yesterday afternoon, Alviva issued a SENS statement confirming it had completed due diligence on Tarsus.
“Alviva shareholders (“Shareholders”) are advised that the Company is in discussions regarding the possible acquisition of Tarsus Technology Group (Pty) Limited,” the cautionary statement read. “The due diligence has been completed, and, if successfully concluded, this transaction may have a material effect on the price of the Company’s securities. Shareholders are, therefore, advised to exercise caution when dealing in the Company’s securities until a further announcement is made.”
Alviva group CEO, Pierre Spies, was unavailable for comment at the time of going to press, but sources close to the deal indicate that negotiations are at an advanced stage and are ongoing.
It is no secret that Tarsus’ major shareholder, Investec, has been looking to sell the group for the past few years and it has come close to sealing deals before. Earlier this year, a private equity company pulled the plug on a possible deal literally at the eleventh hour.
Tarsus has also been preparing itself for sale and as recently as May this year further streamlined its operations into two business divisions – Tarsus on Demand and Tarsus Distribution.
Miles Crisp, group CEO of Tarsus Technology Group, is cautiously optimistic about the latest negotiations.
“Tarsus has been on the market for quite some time now,” Crisp says. “It’s no secret that Investec has never been a long-term shareholder.
“Over the last few months certain companies have looked under the bonnet [at Tarsus] and been in conversations with Investec,” he adds. “Alviva issued a SENS statement yesterday, so they are serious about getting some agreement. It’s a serious conversation and we’ll see where it goes.
“If there’s one thing I’ve learnt from my years in business, something isn’t done until it’s done,” he says. “There are still things like warranties, the Competition Commission, all sorts of processes and legalities that have to be completed.”
And Crisp is not counting his chickens before they hatch.
“Nothing may happen, or something may,” he says. “The Competition Commission, for example, has its own timetable so I don’t know when the deal may or may not come to fruition.
“It is a bit unsettling for our staff, our vendors and our partners, but we’re managing that,” he says.
“We’ve been here before,” Crisp adds, referring to the approach by the private equity firm. “One thing I know is that any transaction is not done until it is done.”