An active acquirer lurks in South Africa.
Johannesburg-based Altron Group could be seeking more overseas acquisitions opportunities.
Bankers and dealmakers should make sure they have CEO Mteto Nyati on speed dial.
Altron, which has a presence in over 25 countries through its operating companies, has proved its staying power under the leadership of Nyati.
The technology group with shares valued at R6.8 billion on the JSE has shed off non-core loss-making assets in 2018 and is in the hunt for more buys.
As a result of off-loading loss-making subsidiaries, Altron has seen its share price jumped more than 40% in 2018.
The company’s main shareholder is seeing more value in the business and seems to be giving a nod to Nyati’s “One Altron strategy”, which is anchored on organic growth, partnerships and selected acquisitions.
Value Capital Partners (VCP), which was co-founded by Antony Ball and Sam Sithole – ex-CEO and CFO respectively of Brait, acquired a 15% stake in Altron for R400 million in March 2017.
Last month, TechFinancials calculated that in the past five months VCP has acquired more than 13 million shares valued at more than R200 million in Altron.
With a shareholder that has deep pockets supporting its strategy, it makes sense for Altron to seek bigger acquisitions abroad. And with years of developing great technologies such as fleet tracking by its subsidiary Netstar should be easy for Altron to expand into new markets.
The company has already expanded into the lucrative market of India.
There are clues about possible targets beyond India.
Nyati recently told ITWeb that the company is targeting partnership opportunities in Malaysia, UK and Germany.
As part of its growth strategy, Altron has already made an acquisition in Australia.
“Looking ahead to the full year 2019, the group will continue to position itself for growth by accelerating our acquisition strategy and identifying companies that will build our capabilities in cloud services, Internet of Things (IoT), data analytics and security,” Nyati also wrote in the company’s recent annual report.
“We are also looking to identify and introduce new innovations in the financial and health technology space, as well as fleet management.”
Nyati further added that the company’s approach to the African market will be to ensure that its current customer base is exposed to its entire solutions offering and then “we will explore acquisition opportunities which exist in our areas of focus”.
The aim of pursuing buys is to bolster Altron as an ICT company through acquisitions of businesses that can expand its four technology growth areas: cloud services, IoT, security and data analytics.
Altron may have a busy year on the mergers and acquisitions front.