Altron

  • Altron has proposed the unbundling and   listing on the London Stock Exchange of its UK subsidiary, Bytes technology   group.
  • The board concluded that the true value of   Bytes UK is not reflected in Altron’s share price. The UK business has a   different growth trajectory, different strategic levers and operates in a   different geographical capital market, with a highly rated peer group.
  • Altron says Bytes would have a secondary   listing on the JSE.
  • Altron is a licensing solution provider for   Microsoft in the UK and South Africa, enabling their software services   division to provide data analytics, artificial intelligence, and most importantly, the Microsoft Azure cloud services. EOH previously had its   Microsoft license revoked, which left a gap in the local market for Altron to   fill.
  • Altron is the single largest Microsoft   provider in the UK, with contracts in both the private and public sectors.   And they recently won a five contracts from the NHS worth R2.7 billion. Bytes   contributes 41% to Altron’s revenue, and 23% to core earnings.
  • The history of the unbundling is as follows:   The Venters, the founding family of Altron, wanted to exit the family   business. Value Capital Partners was brought in to restructure Altron’s debt,   inject capital, and new management to help them realise value. The business   sold off non-core assets and focused on growing its UK operations, which are   now highly profitable after building-up scale over the past few years.
  • The unbundling will allow Bytes to tap the   deep capital market in the UK, in the form of a simplified UK-focused   offering. This will leave Altron as the African operations, a separate option   for investors, with its primary listing remaining on the JSE.
  • Robbie Venter, who is still a director of   the group (immigrated to the UK a few years ago), has been involved in the   Bytes business since its inception. His experience will continue to benefit   the company once it is unbundled.
  • Altron has appointed Rand Merchant Bank as   the financial adviser and transaction sponsor in South Africa and is in the process of appointing an adviser in the UK to advise Bytes UK on the potential listing and potential share offering.
Altron