JSE Listed Adapt IT announced on Monday it has agreed to buy value added distributor CQS Investments for more than R200 million, enabling the technology firm to diversify into the auditing and accounting professions and will enhance its technology. By Gugu Lourie
The software and computer services firm said it has entered into a share purchase agreement with Ethos to buy CQS Investment, which has a footprint in Nigeria, Kenya, Zambia, Tanzania, Botswana and Zimbabwe through a direct and a distributor network.
This targeted acquisition is in line with Adapt IT’s strategy of planned acquisitive growth and allows the company to further expand and strengthen its customer base and solutions set, especially in the Financial Services sector, and the wider Private and targeted Public Sector markets.
Sbu Shabalala, CEO of Adapt IT, says the numerous synergies between Adapt IT and CQS only highlight the value of this acquisition in augmenting Adapt IT’s overall growth strategy, not only in key sectors in South Africa but wider markets in Africa.
“Adapt IT and CQS can benefit from the synergy and scale advantages that already exist to leverage further opportunities to increase revenue and returns. The entire CQS leadership and operational teams will remain with the business.”
Ethos is an agent of certain special purpose investment vehicles affiliated consisting of Tascali Investments 5, a wholly-owned subsidiary of Kapela Investments, a majority black owned investment company, A. Cohen, The Trustees of La Luna Trust and R. Hampton.
With over 20 years in business and approximately 4 000 clients, CQS Investments is a value added distributor of a combination of its own- and third party- (being CaseWare, ACL and Confirmations.com) Intellectual Property software solutions for audit, data analytics, controls monitoring, risk management and financial reporting to financial professionals, corporates and the public sector.
Adapt IT has been a hugely successful software and computer services stock listed on the JSE and it continues to make money in the highly competitive technology market.
Those who invested in Adapt IT three years ago are now benefiting from the rising share price
The company has managed to deliver positive growth in a challenging market that has seen the voluntary delisting of a bigger rival Gijima, which was struggling and trying to resuscitate its growth through a turnaround strategy.