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Listing of Ayo Technology on The Main Board of The JSE Limited (“JSE”) and Abridged Pre-Listing Statement
AYO TECHNOLOGY SOLUTIONS LIMITED
(Previously Sekunjalo Technology Solutions Limited)
(Incorporated in the Republic of South Africa)
Registration number: 1996/014461/06
JSE share code: AYO
ISIN ZAE000252441
(“AYO Technology” or the “Company”)
LISTING OF AYO TECHNOLOGY ON THE MAIN BOARD OF THE JSE LIMITED
(“JSE”) AND ABRIDGED PRE-LISTING STATEMENT
1. INTRODUCTION AND HISTORY
1.1. AYO Technology is a broad based black economic empowerment
(“B-BBEE”) information and communication technology (“ICT”)
group offering numerous end to end solutions to a host of
industries. The AYO Technology group was established in 1996
and has evolved over this time through continually adapting
to the local and international ICT landscape. The process of
adaptation was enabled by acquiring new businesses,
partnerships and sourcing innovative technology within its
existing portfolio. AYO Technology, through its divisions,
subsidiaries and partners provides solutions to both the
public and private sector within South Africa and abroad,
with its private sector client base comprising mostly blue-
chip multinationals. The AYO Technology group maintains
strong relationships and holds key value-added reseller or
supplier agreements with principles such as Nokia Siemens
Networks South Africa (Pty) Ltd, InterSystems Corporation,
Cisco Systems, Microsoft Corporation, IBM and Riverbed
Technology Inc, which provides the group with continuous
access to up to date technology. The AYO Technology group
has a strategic relationship with BT Communications Services
South Africa Proprietary Limited (“BT”).
1.2. Shareholders are herewith advised that the JSE has granted
AYO Technology a listing by way of introduction of all its
issued ordinary shares on the main board of the JSE
(“Listing”), under the abbreviated name “AYO”, share code
“AYO” and ISIN ZAE000252441, with effect from the
commencement of trade on Thursday, 21 December 2017
(“Listing Date”), subject to obtaining the requisite
shareholder spread as required in terms of the listings
requirements of the JSE (“JSE Listings Requirements”). AYO
Technology will be listed in the “Computer Services” sector
of the main board of the JSE.
1.3. In order to provide AYO Technology with additional capital
to fund its further expansion, AYO Technology will, in
conjunction with the Listing, undertake a private placement
involving an offer to invited investors to subscribe for up
to 99 782 655 ordinary no par value shares of the Company
(“Private Placement Shares”) at R43.00 per share thereby
raising R4.3 billion for AYO Technology (“Private Placement”).
1.4. Prior to the Listing, AYO Technology shall issue 31 960 000
ordinary no par value shares (“B-BBEE Consortium Shares”) to
various broad based empowered consortiums (“B-BBEE
Consortium Share Issue”).
1.5. African Equity Empowerment Investment Limited’s shareholding
in AYO Technology will, as a result of the Private Placement,
be reduced from 69.55% (following the B-BBEE Consortium Share
Issue) to approximately 49% on the Listing Date
2. PUBLICATION AND DISTRIBUTION OF PRE-LISTING STATEMENT
2.1. The pre-listing statement in relation to the Listing, which
contains detailed information regarding AYO Technology
(“Pre-listing Statement”), was published today, Wednesday,
13 December 2017 on AYO Technology’s website (www.ayotsl.com).
2.2. Terms appearing in title case in this announcement and that
are not otherwise defined herein, shall bear the meanings
assigned to them in the Pre-listing Statement.
3. SALIENT DATES AND TIMES RELATING TO THE PRIVATE PLACEMENT AND
LISTING
The salient dates and times relating to the Private Placement
and the Listing are set out below:
2017
Abridged Pre-listing Statement published Wednesday, 13 December
on SENS on
Pre-listing Statement published on AYO Wednesday, 13 December
Technology’s website (www.ayotsl.com) and
made available for inspection
Opening date of Private Placement on Wednesday, 13 December
Abridged Pre-listing Statement published Thursday, 14 December
in the press on
Closing date of Private Placement at 17:00 Friday, 15 December
on
Notification of application to successful Monday, 18 December
Invited Investors on
Results of Private Placement released on Monday, 18 December
SENS on
General Meeting to approve the issuing of Monday, 18 December
the Private Placement Shares and the B-BBEE
Consortium Shares at 10:00 on
Accounts at CSDPs/Brokers updated in Thursday, 21 December
respect of Dematerialised Shareholders on
Listing of Shares on the JSE expected at Thursday, 21 December
commencement of trade at 09:00 on
Notes:
1. The above dates are subject to change. Any such change will be
announced on SENS.
2. All references to dates and times are to local dates and times
in South Africa.
3. Invited Investors must advise their CSDP or Broker of their
acceptance of the Private Placement Shares in the manner and
cut-off time stipulated by their CSDP or Broker.
4. CSDPs effect payment on a “delivery-versus-payment” basis.
4. ABRIDGED PRE-LISTING STATEMENT OF AYO TECHNOLOGY
The Abridged Pre-Listing Statement appearing below, is not an
invitation to the public to subscribe for Shares, but is issued
in compliance with the JSE Listings Requirements for the
purpose of providing information to the public and investors
in respect of AYO Technology.
4.1. OVERVIEW OF THE AYO TECHNOLOGY GROUP
4.1.1. AYO Technology is an ICT business focused on growth and
its strategy is underpinned by a vision of creating a truly
global, innovative and scalable B-BBEE ICT Group with its
roots in South Africa. It intends to achieve this through:
4.1.1.1. targeting global innovation and growth areas of ICT and
acquiring/partnering with experts in the space;
4.1.1.2. exploring synergies between its partners and its
existing portfolio, with a view to maximizing the
potential of its existing portfolio; and
4.1.1.3. exploiting the opportunities that exist in servicing
multinationals based in South Africa who require both
B-BBEE and an international network capability.
4.1.2. AYO Technology’s growth strategy will be enabled by the
capital raised pursuant to the Private Placement. The
capital raised, the strategic relationship with BT and the
strong acquisition pipeline will enable AYO Technology to
be one of the most empowered multidiscipline ICT groups
with, a full suite of products and services that is able
to deliver turnkey ICT solutions to any client.
4.2. EXISTING BUSINESS
The various existing businesses of the AYO Technology Group
are detailed below:
4.2.1. HST
4.2.1.1. HST was founded in 1980 and is a specialist provider of
optimized and integrated healthcare ICT solutions with
offices in Cape Town, Johannesburg, Durban and
Polokwane. HST’s capabilities include:
4.2.1.1.1. the provision of modular and integrated healthcare
information systems across all levels of care;
4.2.1.1.2. development, implementation and training services;
4.2.1.1.3. project management of complex and large implementations;
4.2.1.1.4. a blend of local and international skills, expertise and
products; and
4.2.1.1.5. the provision and management of mission critical
ICT infrastructure.
4.2.2. Puleng Technologies
Puleng Technologies delivers product solutions and
professional services to predominantly large blue-chip
organisations. Puleng Technologies is a proudly South
African B-BBEE Level Two ICT company with its roots firmly
planted around building local expertise and providing
clients with “Project Success” linked to the solutions
that Puleng Technologies design and support. The Puleng
Technologies blueprint provides clients with a client-
centric strategy to manage and secure the two most valuable
assets an organisation has, its “data” and “users”, while
at the same time providing a platform to build an
efficient, collaborative governance, risk, and compliance
(GRC) program to address IT risk facing its client’s
businesses.
4.2.3. Headset Solutions
Headset Solutions was established in 1993 and is currently
one of the largest importers and distributors of headsets
on the African continent, with a presence in 10 African
countries. Headset Solutions distributes two of the most
notable brands within the telecommunications and consumer
electronic markets, being Plantronics, which is a personal
audio communication headset designer for a wide range of
devices; and Konftel, which is one of the leading
manufacturers of audio conferencing equipment. Headset
Solutions seeks to deliver cutting edge telecommunication
solutions backed up by exceptional service and after sales
support. It is viewed as a value-added distributor by its
principals and distributes throughout the African market
via an in-house warehouse and distribution channel.
4.2.4. Afrozaar
Afrozaar is a software consulting services and product
development business, that specialises in providing
scalable digital solutions to retailers, media groups and
brand agencies. Afrozaar was founded in 2010, and has a
client footprint in Africa, USA and Europe. Afrozaar’s
specialised digital media product set has been bundled
into “The Publisher’s Toolbox”, a platform where each
product can exist independently of the other, however when
integrated, provides an enterprise content distribution
ecosystem. Afrozaar is focused on the provision of
multimedia platforms within an Amazon cloud hosted
environment, where scalability and performance is
achievable with minimal risk and cost.
4.2.5. WWC
WWC is a digital transformation strategy and advisory firm
with a 15-year track record in providing technology, client
and change management solutions to businesses across
Africa in order to add real business value. WWC works with
medium to large B2C and B2B clients in government, retail,
finance, telecommunications and the automotive industry.
As a people and technology company, WWC partner with
business leaders to create a clear picture of their
organisation’s digital potential and help them articulate
their vision to the business. With these fundamental
building blocks in place, their clients focus shifts to
mapping out the best way to making that picture a reality.
4.2.6. Digital Matter
Digital Matter, formed in 2000, is a specialist IT company
focusing on enterprise application and solution
development. Digital Matter is a certified Microsoft
Corporation development partner and incorporates Microsoft
Corporation technology as a digital platform in all
applications, products and solutions. Digital Matter has
product offerings covering mobile inspection management
(InspectionOne), fixed asset management (AssetAuditor),
tracking solutions, as well as solutions developed for
clients in mobile field service, property inspections,
franchise evaluation, mobile banking and commissioning.
4.3. COMPETITIVE ADVANTAGES
4.3.1. Empowerment
The Board and management view AYO Technology’s empowerment
credentials as a significant competitive advantage, which
is underpinned by the B-BBEE ICT Sector Codes that seek to
advance economic transformation and enhance the
participation of Black People in the South African economy.
B-BBEE has broad support across South Africa, and business
communities are expected to take the lead in transformation
by addressing employment and ownership within their
businesses. Recently new and more onerous B-BBEE ICT Sector
Codes have been published which provide more preferential
procurement points to companies in the ICT sector that
procure products and services from entities that are 51%
Black owned (and 30% Black women owned) (as these terms
are defined in the B-BBEE ICT Sector Codes). It is these
additional 11 points that customers of the Group can
benefit from by procuring up to 40% of their total
procurement from 51% Black owned businesses and a further
5 points for procuring 12% of their total procurement from
30% Black women owned businesses. AYO Technology believes
that its B-BBEE ownership will enable it to rely on those
changes to expand its business. In addition, South African
companies listed on the JSE now have to publish a
compliance report on their B-BBEE status annually and
report on this to the B-BBEE commission established in
terms of the B-BBEE Act. Considering the above legislation
and the current competitive landscape, AYO Technology is
well positioned to increase the market share of its current
product and service offering and has attracted significant
deal flow to acquire or partner with companies that require
B-BBEE ownership in order to maintain or grow their
businesses. Relative to its peers in the South African ICT
sector, AYO Technology is expected to be favourably
positioned to offer its clients more points for
preferential procurement on their B-BBEE scorecard due to
AYO Technology being 51% Black owned (and 30% Black women
owned) (as these terms are defined in the B-BBEE ICT Sector
Codes). The ability of AYO Technology to maximise
preferential procurement points also provides the
additional benefit of minimising operational risks for its
clients.
4.3.2. Key Strategic Relationship with BT
4.3.2.1. AYO Technology will subscribe for 99% of the issued
shares of Kilomix Investments, which holds 30% of the
issued shares of BT, post the Listing, subject to the
fulfilment of certain conditions precedent.
4.3.2.2. In addition to being an equity holder in BT, AYO
Technology has entered into the BT Alliance Agreement ,
in terms of which AYO will be one of BT’s strategic
partners in South Africa.
4.3.2.3. In terms of the strategic relationship:
4.3.2.3.1. AYO Technology and BT will pursue opportunities with
new clients, where there is scope for co-operation
and/or complementary products and/or services;
4.3.2.3.2. BT will partner with AYO Technology in pursuit of
existing BT clients and new prospective clients that
are international companies headquartered in South
Africa (or with significant ICT requirements in South
Africa), with ICT requirements that align to BT’s
standard products and services, where such clients
have particular B-BBEE requirements (in this regard BT
and AYO Technology have already concluded a teaming
agreement in relation to a request for proposal already
submitted to a prospective client);
4.3.2.3.3. Depending on the needs of the client, AYO Technology
will generally act as the prime contractor, with BT
acting as the subcontractor, however in certain
circumstances BT may act as the prime contractor and
AYO Technology as the subcontractor;
4.3.2.3.4. AYO Technology and BT will be entitled to market each
other’s products and services in South Africa, on a
“resell” basis or as part of a bundled solution;
4.3.2.3.5. it is envisaged that a number of employees of BT may
transfer, by written agreement, to AYO Technology in
order to operationalise and empower AYO Technology
with the skills and intellectual property required to
fulfil contracts awarded; and
4.3.2.3.6. AYO Technology agrees to remain at least 51% Black
owned and 30% Black woman owned.
4.4. INCREASING PORTFOLIO THROUGH ACQUISITIONS
As part of AYO Technology’s growth strategy and stemming
from its empowerment credentials and the strategic
relationship with BT, AYO Technology will expand its product
and service stable and in this regard a host of complementary
target companies have been engaged and are at various stages
of due diligence, with agreements expected to be concluded
post the Listing. The target companies have been selected
for the complementary products and services they offer to
AYO Technology’s existing product and service offering.
4.5. CLIENT OFFERINGS – DIVERSIFIED PORTFOLIO
The AYO Technology Group’s broad product and service offering
for the following categories includes associated services,
products and infrastructure platforms.
4.5.1. Big Data Analytics
The Group’s technologies, allows its clients to analyse
enormous datasets in real-time, facilitating pro-active
decision making on information that is real-time. This is
especially relevant in, but not limited to, a healthcare
environment where patient safety is of utmost concern.
4.5.2. Integration
The Group deploys an integration engine, which provides
the ability to integrate, in real time, and in accordance
with international standards such as HL7 and IHE, thousands
of devices, analyzers and external systems in order to
deliver mission-critical results, guidance and
interventions. Such integration is currently operational
within the NHLS and the Western Cape Government where 1800
integration points are active at any given time.
4.5.3. Business Process Management
This is the process of analysing existing processes and
applying change management and business process re-
engineering techniques, allowing AYO Technology to re-
align its client’s business and operational processes to
implement solutions in accordance with best practice,
ensuring optimal value to clients.
4.5.4. Software Development
Bespoke software developments, localisation of
international productions for the African market and
development of new solutions is a focus area within the
AYO Group. The AYO Group uses this skillset both
internally, to develop products, as well externally by
selling this service to clients.
4.5.5. Internet of Things (IoT)
The AYO Technology Group has developed products that are
at the forefront of wearable technologies in the
entertainment, healthcare and security sectors.
4.5.6. Data Security
The AYO Techology Group provides data security within the
South African banking, e-commerce and telecommunications
sectors focusing on identity management, access management
and governance, data auditing and data protection as well
as security management for networks, servers and devices
amongst other things. AYO Techology assists organisations
in managing data, security governance and risk and ensuring
compliance.
4.5.7. Cloud Services
AYO Technology has the ability to decommission an on-
premise data centre and migrate to cloud or alternatively
offer a hybrid cloud by integrating the on-premise data
centre with a cloud. AYO Technology further has the
ability to monitor performance of its client’s cloud
application and infrastructure, and leverage technology
with algorithms and heuristics to provide insights into
how its clients can improve cloud cost management and still
deliver the same workload, gain cloud visibility and
increase cloud resource utilization.
4.5.8. Digital Transformation, Advisory and Training Services
AYO Technology’s advisory services offers guidance that
enables clearer visualization and subsequent communication
of the potential for digital transformation within an
organisation. AYO Technology then works with the
organisation to turn this picture of potential into a
roadmap for digital transformation.
4.5.9. AYO Academy
Experience and skills availability are the biggest
contributing factors to the success of any project.
Unfortunately, the reality is that there is a lack of
availability of experienced people in the local market,
particularly emerging Black software developers. In order
to ensure future success and longevity, AYO Technology has
developed a mentorship programme in order to accelerate
skills development within its business. In terms of this
programme, AYO Technology offers bursaries to students or
employs them on an internship or learnerships basis with
the possibility of being retained as permanent employees
thereafter.
4.6. RATIONALE FOR THE LISTING
4.6.1. The South African ICT sector is experiencing market
consolidation to address a South African market demand for
turn-key service providers. Over and above the demand for
scalable turnkey service providers, the South African
market lacks an empowered service provider and upon
Listing, AYO Technology will be positioned as one of the
leading empowerment groups in the South African ICT sector.
Thus, in light of the current market conditions and
regulation pertaining to Black economic empowerment in
South Africa, AYO Technology is well positioned to capture
part of the growing ICT spend across the South African
market. AYO Technology’s services are currently deployed
in Africa and Europe and, as a result of AYO Technology’s
anticipated shareholding in, and strategic relationship
with BT post Listing, an international brand providing
access to global technology trends and to the broader
global market, AYO Technology is further placed to grow
its existing footprint.
4.6.2. Accordingly, the rationale for the Listing is to:
4.6.2.1. raise capital in order to fund the rollout of the BT
strategic relationship;
4.6.2.2. raise capital in order to fund the BT Subscription;
4.6.2.3. raise capital in order to fund AYO Technology’s
acquisition pipeline;
4.6.2.4. allow AYO Technology to use listed scrip to fund future
acquisitions;
4.6.2.5. provide AYO Technology’s management and employees an
opportunity to acquire an equity stake in AYO Technology
post the listing through the AYO Technology Incentive
Scheme, which will also serve as a valuable retention
and incentivisation tool;
4.6.2.6. provide Invited Investors with an opportunity to
participate in the Private Placement; and
4.6.2.7. provide Shareholders with a liquid, tradeable asset
within a regulated environment and with a market-
determined share price.
4.7. PROSPECTS
4.7.1. The Board believes that AYO Technology is well positioned
for growth over the next three to five years and into the
future. It is expected that the growth will be driven
through leveraging AYO Technology’s strong empowerment
credentials, its strategic relationship with BT, as well
as through a combination of acquisitions of new businesses,
partnerships and sourcing innovative technology within its
existing portfolio.
4.7.2. AYO Technology’s vision is to combine leading industry
solutions and services in order to provide digital
innovation that will help enable its clients to achieve
their business objectives and gain a competitive advantage
through successful digital transformation.
4.7.3. Given the above, the Board is of the view that AYO
Technology’s prospects are favourable.
4.8. PRIVATE PLACEMENT AND USE OF PROCEEDS
4.8.1. AYO Technology will, in conjunction with the Listing,
undertake the Private Placement by way of an offer to
Invited Investors to subscribe for Private Placement
Shares in AYO Technology at R43.00 per share, thereby
raising R4.3 billion.
4.8.2. Only persons who fall within the categories envisaged in
section 96(1)(a) of the Companies Act or who subscribe for
Private Placement Shares, the subscription cost of which
is not less than R1 000 000 per single addressee acting as
principal (as contemplated in section 96(1)(b) of the
Companies Act), are entitled to participate in the Private
Placement.
4.8.3. The Listing is conditional on (i) shareholders of AEEI
voting in favour of the resolutions required to issue the
Private Placement Shares and the B-BBEE Consortium Shares
at the General Meeting, (ii) all Private Placement Shares
being placed in terms of the Private Placement and (iii)
AYO Technology obtaining the requisite shareholder spread
as required in terms of the JSE Listings Requirements.
Should any of these conditions precedent fail, the Private
Placement and any acceptance thereof shall not be of any
force or effect and no person shall have any claim
whatsoever against AYO Technology or any other person as
a result of the failure of the conditions.
4.9. SHARE CAPITAL
4.9.1. The authorised and issued share capital of AYO Technology,
immediately prior to the Listing Date, is set out below:
Number of R
Shares
Authorised shares
Ordinary Shares of no par 2 000 000 000 -
value
Redeemable Preference shares 50 000 -
of R0.01 each
Issued shares
Stated capital – ordinary 244 342 539 232 069 087
Shares of no par value
Treasury Shares - -
4.9.2. Following the Private Placement (and assuming that R4.3
billion is raised in the Private Placement), the authorised
and issued shares of AYO Technology on the Listing Date is
expected to be as follows:
Number of R
Shares
Authorised shares
Ordinary Shares of no par 2 000 000 000 -
value
Redeemable Preference shares 50 000 -
of R0.01 each
Issued share capital
Stated capital – ordinary 344 125 194 4 522 723 265
Shares of no par value
Treasury Shares - -
4.10. DIRECTORS
The full names, ages, business address and capacities of the
Directors of AYO Technology are provided below:
Full name Age Capacity Business Address
Salim Young 60 Chairman, 17 Belair Drive,
independent non- Constantia, Cape Town,
executive 8001
Director
Kevin Andrew 42 Chief Executive 9 Simba Road,
Warwick Hardy Officer Sunninghill,
Johannesburg
Naahied 39 Chief Financial 67 Rosmead Avenue,
Gamieldien Officer Kenilworth
Siphiwe 31 Chief Technology 9 Simba Road,
Nodwele Officer Sunninghill,
Johannesburg
Walter Gideon 32 Independent non- 42 Willow Ridge,
Madzonga executive Parade Ring Road,
Director Royal Ascot, Milnerton
7441.
Khalid Abdulla 52 Non-executive Quay 7, East Pier,
Director Breakwater Boulevard,
V&A Waterfront, Cape
Town, 8001
Cherie 54 Non-executive Quay 7, East Pier,
Felicity Director Breakwater Boulevard,
Hendricks
V&A Waterfront, Cape
Town, 8001
Aziza Begum 55 Independent non- 26 Mayfield Avenue,
Amod executive Rondebosch, Cape Town,
Director 8001
Mbuso 39 Independent non- 3 Callington Crescent,
Faithstrong executive 7 Villa Bella,
Khoza Director Parklands, 7441
Telang Michael 39 Independent non- 1 Hamlin Manor Estate,
Ntsasa executive Glenluce Drive,
Director Douglasdale, 2021
4.11. COPIES OF THE PRE-LISTING STATEMENT
Copies of the Pre-listing Statement are available in English
and may be obtained during normal business hours from
Wednesday, 13 December 2017 until the Listing Date (both
days inclusive), from the registered office of AYO Technology
at Quay 7 Breakwater Boulevard, East Pier, V&A Waterfront,
Cape Town and from the offices of PSG Capital Proprietary
Limited, the Transaction Advisor and Sponsor, at 1st Floor,
Ou Kollege, 35 Kerk Street, Stellenbosch, 7600 and 2nd Floor,
11 Alice Lane (Bowmans Building), Sandhurst, Sandton, 2196.
A copy of the Pre-listing Statement will also be available
on AYO Technology’s website (www.ayotsl.com) from Wednesday,
13 December 2017.
Cape Town
13 December 2017
Transaction Advisor and Sponsor: PSG Capital Proprietary Limited
Corporate Advisor and Bookrunner: AEEI Corporate Finance
Proprietary Limited
Independent Reporting Accountant and Auditor: Grant Thornton
Legal Advisor: Tshisevhe Gwina Ratshimbilani Inc
Date: 13/12/2017 12:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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