- 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.