Conclusion of Binding Offer to Acquire a Controlling Interest in Sizwe Africa IT
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
(“AYO Technology” or “the Company”)
CONCLUSION OF BINDING OFFER TO ACQUIRE A CONTROLLING INTEREST IN SIZWE
Shareholders are hereby advised that the Company has entered into a binding offer with
Loxisource (Pty) Ltd (“Loxisource”) Loxisource and Alexisource (Pty) Ltd (“Alexisource”) to
acquire 55% of the share capital of Zaloserve (Pty) Ltd (“Zaloserve”) from Loxisource,
Alexisource and Rev Vukile Mahana Ltd (“Binding Offer”).
Zaloserve is an investment holding company that holds a 100% shareholding in Opiwize (Pty)
Ltd, which in turn holds a 100% shareholding in Sizwe Africa IT (Pty) Ltd (“Sizwe”).
Sizwe offers various information and communication technology (“ICT”) services to its
customers, including a focused spectrum of physical infrastructure, metro and long-distance
optic fibre, facility management, continuous energy supply, networking and security to
hosting, storage server processing, mobility, data centre, end-user computing and associated
consumables. Sizwe operates in 3 concentrated business units, namely managed services;
unified network solutions and fibre & facilities management that service and have long
standing relationships with both public and private sector companies. The Sizwe group has
built a firm reputation for good performance and has been supplying great quality products
and services within the ICT sector for the past 2 decades.
AYO has a stated strategy to grow organically and through acquisitive growth. Zaloserve,
through its investments in the Sizwe, is a significant, established player in the ICT sector and
is inline with AYO’s “go to market” strategy. Additionally, the acquisition allows AYO to expand
its product basket and client offering as Sizwe will be one of AYO’s key platform providers.
Sizwe has a broad base of public sector customers and blue chip private customers and has
a strong annuity based income. In the year ending 30 June 2018, Sizwe had revenues in
excess of R1 billion, strong cash generation with cash from operations of R75 million and
EBITDA of R70 million.
In terms of the Binding Offer, the purchase price for the 55% interest in Zaloserve will be
R165 million (“Purchase Price”), based on an equity value of R300 million for Zaloserve. A
payment of 90% of the Purchase Price will be settled upfront with the balance being settled
upon the achievement of warranted profits for a 3-year period.
The Binding Offer is subject to the fulfilment of various conditions precedent including, inter
alia, the completion of detailed financial, tax, legal, technical, operational and human
resources due diligence to the satisfaction of AYO and the conclusion of definitive sale
agreements. Shareholders will be advised when the definitive sale agreements have been
The above announcement is a voluntary announcement as the size of the potential
acquisition is under the JSE categorisation thresholds.
11 September 2018
Sponsor - PSG Capital
Legal Advisors - Webber Wentzel
Corporate Advisors - Vunani Capital
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