Johannesburg - JSE-listed African Equity Empowerment Investments’ (AEEI) spending spree in the technology sector continued yesterday with the company announcing that it had acquired a 51 percent stake in Kalula Communications for an undisclosed amount.
AEEI, which was formerly known as Sekunjalo Investments, said it expected the investment in Kalula would have a payback in a period of three to four years.
The company said the payback excluded the exponential capital appreciation it expected.
The purchase consideration was concluded partly in issuing shares in AEEI’s subsidiary and technology holding company.
Khalid Abdulla, the chief executive of AEEI, said the deal was in line with the company’s strategy to beef up its information technology (IT) division.
“This synergistic acquisition further compliments our already substantial technology offering by increasing our market share penetration and client reach and will be instrumental in assisting our technology division to achieve its objectives for substantial growth over the next few years,” he said.
Somerset West-based Kalula Communications, which trades as Headsets Solutions, is an importer and distributor of electronic products.
The company sells brands such as Konftel, which manufactures audio conferencing equipment, and Plantronics, which designs headsets. It has more than 400 partners in South Africa and is one of the largest headset distributors in Africa.
Tony Brown, the chief executive of Kalula, said the conclusion of the deal meant Kalula was in a better position to increase its customer base and grow the business.
“We look forward to the growth opportunities provided by the synergies between Headset Solutions and AEEI,” Brown said. “Together we will be able to leverage our relationships to further increase our customer base and drive the company into the Unified Communications Market.”
Abdulla said Kalula would add R60 million to AEEI’s annual revenue. He said he expected the group’s total IT revenue to increase to R450m next year from the R215m it brought in this financial year.
AEEI last month posted a 53 percent increase in its operating profit and 24 percent in net asset value for the year ended August.
This month the group announced its plans to list its Premier Foods and Fishing division on the JSE main board by the first quarter of next year.
The acquisition is AEEI’s second foray into the IT sector in two months after it bought a 57 percent stake in Puleng Technologies last month.
The company’s IT division now includes Health Systems Technologies, Santoga Software, Digital Matter, Emergent Energy, World Wide Creative, Afrozaar and a stake in multinational company, British Communications.
Abdulla said the investment the company was making in the IT sector was providing value for shareholders.
“We are excited about our fast-growing plans to create shareholder value with our diversified technology products and services. This additional deal with Kalula is further testament to our ambition to realise the goals and objectives that we have set out in our Vision 2020 strategy.”
AEEI shares fell 4.29 percent on the JSE yesterday to R3.35.
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