JSE-listed Allied Electronics (Altron) subsidiary Bytes SA will acquire 27% of its issued share capital for R669-million from a consortium led by Kagiso Strategic Investments, that is indirectly owned by Kagiso Tiso Holdings (KTH), by way of a share repurchase, Altron said on Friday.

Altron CE Robert Venter said the transaction, which would become effective on June 30, would be value enhancing for Altron’s shareholders, adding that the company considered it to be an excellent allocation of capital.

“Bytes SA is and has been performing well over the last few years, and Altron will now own 100% of its issued share capital. Similar to our recent acquisition of the minority shares of [Altron subsidiary] Altech, we are investing further in a business we know well and have been managing for decades,” he said.

Venter added that Bytes SA’s relationship with KTH had been highly fruitful for the company and the Altron group, stating that significant value would also be realised through this transaction for the broad-based black economic-empowerment (BBBEE) shareholders of KTH.

Meanwhile, Bytes SA CEO Rob Abraham said the company’s partnership with KTH had seen significant benefits for both organisations and had demonstrated that the principles of BBBEE could be applied in a positive manner.

“This has probably been the most successful empowerment transaction in the information technology industry in South Africa, which has been mutually beneficial for both parties,” he said.

“Ours has been a long and mutually rewarding relationship with Bytes Technology Group. Having been invested in the organisation for ten years, we have continuously been impressed with the organisation and its commitment to becoming the best information communications technology provider in Africa,” KTH CEO Vuyisa Nkonyeni commented.

Since the delisting of Altech in August 2013 and the formation of Altron TMT – a combination of the Altech and Bytes businesses – the Altron group has been in a position to review all its BBBEE structures to align Altron TMT and Altron Power, the latter housing the Powertech operations.

The alignment of BBBEE structures was one of the many steps Altron had taken recently to streamline and elevate the group. Its restructuring project, which included the integration of Altech and Bytes, the introduction of shared services and a drive to increase innovation and business development, was expected to be completed in the first half of 2016. 

“Altron is moving from being an investment holding company to an operating entity.  In our new structure, we are not only able to run the business more efficiently but also provide better products, services and solutions to our customers,” Venter concluded.