SA's Altech in talks for $60m Kenya firm
01 November 2011, 16:07
Johannesburg - South Africa's Allied Technologies Ltd is in talks to pay up to $60 million for unlisted Kenyan IT firm Symphony, in order to help revive its struggling business in fast-growing East Africa.
Johannesburg-based Altech, a $742 million telecoms and IT firm, has been in talks to buy Symphony for several months and is nearing the end of its due diligence, said a source, who would prefer to be anonymous.
Altech is likely to pay between $50 to $60 million for Symphony, giving it a price-to-earnings ratio in the teens, the source said.
Buying Symphony, which has also has operations in Uganda, Rwanda, Burundi and Ethiopia, would augment Altech's existing business in a region where it has struggled.
Altech in September replaced the head of its under performing Kenyan data unit and named a new team to lead its East African operation.
"The turnaround of our east African activities is clearly a top priority within the group and is receiving considerable management attention," the company said when it released its first-half earnings in September.
South African firms are increasingly looking to do deals beyond their crowded home market to tap into the rising disposable incomes in poor but fast-growing regions in Africa.
The deal would be one of the acquisitions made by a South African company in Kenya, and would also be the second-largest M&A deal in Kenya this year following East African Breweries' $225 million buy-back of an asset stake from SABMiller.
Altech is a diverse business whose operations include telecoms, electronics and IT services. In South Africa it is best known for its Altech Netstar unit, which tracks and recovers stolen cars.
Symphony provides IT consulting and services including hardware, software and networking. It is owned by the Da Gama Rose Group, led by prominent Kenyan businessman Horatius da Gama Rose.
Its partners include IBM, Cisco Systems, Dell Inc, General Electric Company, Microsoft Corp, China's Lenovo Group and Huawei Technologies , according to its website.