Today, Bytes has been admitted to the premium listing segment of the official list of the UK’s Financial Conduct Authority, to unconditional trading on the Main Market of the London Stock Exchange, and the Main Board of the Johannesburg Stock Exchange by way of a secondary inward listing (“Admission“). This marks the completion of the demerger of the Bytes group from the Altron Group, a transaction which Altron announced to the market in April 2020. The achieved price of £2.70 per Bytes ordinary share (the “Issue Price“) results in a market capitalisation at the Issue Price of approximately GBP 647 million (c.R13 billion) on Admission. The Issue Price was in the top half of the previously communicated price range of £2.40 to £2.90 per Bytes ordinary share. Approximately 40% of the Bytes ordinary shares are distributed to existing Altron shareholders and the remaining shares are held by investors located outside South Africa, and Bytes management.
As a result of the demerger of Bytes, Altron shareholders will receive, after tax and transaction costs, a consideration of approximately GBP542m (c.R10.9 billion) in the form of Bytes ordinary shares and cash. If this is combined with Altron’s current market capitalisation, excluding Bytes, of approximately R3.9 billion, Altron shareholders hold approximately R14.8 billion of value in Altron shares, Bytes shares and cash. Prior to Altron announcing the demerger on 2 April 2020, Altron’s market capitalisation was approximately R7.3 billion – through this transaction Altron has created over R7 billion of value for its shareholders. A shareholder who has held Altron shares from the time of the initial announcement to the completion of the demerger would have seen the value of their holding double. On the same basis, there has been almost a fivefold increase in shareholder value since the announcement in December 2016 of the investment by Value Capital Partners (“VCP”) and the changes announced to the Altron Board followed by the appointment of Mteto Nyati as CEO in April 2017.
The demerger of Bytes tops a multi-year turnaround for Altron where management has consistently delivered on what it has promised to shareholders. Through this demerger Altron has demonstrated its ability to create significant value for shareholders with the execution of this highly complex transaction. Mike Leeming, chairman of the Altron Board, says “we are very proud of this attractive outcome for Altron shareholders. I would like to specifically thank Neil Murphy and Keith Richardson and the rest of the Bytes management team who have stealthily and patiently over many years built a well-positioned and fast-growing business in the United Kingdom. I would also like to thank the Altron Board for supporting this transaction from the beginning and in particular Value Capital Partners for initiating this process of significant value unlock. Lastly the execution of this highly complex, multi-jurisdictional transaction would not have been possible without the support and hard work of the senior Altron management team and the various transaction advisors across both South Africa and the United Kingdom.”
With the Bytes demerger now complete Altron will continue to focus on its remaining businesses (“Altron 2.0”) and drive the growth strategy it has communicated to the market. Altron 2.0 is a R7 billion revenue business with a strong balance sheet and exciting prospects as it continues to leverage the growing need for digital transformation and data. Mteto Nyati, the CEO of Altron, says: “With our purpose of delivering innovation that matters, and a set of highly differentiated technology solutions, including telematics, health and financial services platforms, cloud services, data analytics, artificial intelligence and various security offerings we look forward to delivering strong earnings growth over the next five years. In addition, we will continue to look for opportunities to further unlock value for our shareholders. We also wish our colleagues and friends at Bytes luck for the future and are really looking forward to seeing all they will achieve”
This announcement is an advertisement and does not constitute a prospectus in connection with an offering of securities. These materials may not be published, distributed or transmitted by any means or media, directly or indirectly, in whole or in part, in, into or within the United States. These materials do not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. Securities may not be offered or sold in the United States absent (i) registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or (ii) an available exemption from registration under the Securities Act. The securities mentioned herein have not been, and will not be, registered under the Securities Act and will not be offered to the public in the United States.
The announcement does not constitute an offer for the sale of or subscription for, or the solicitation of an offer to buy and subscribe for, securities to the public as defined in the South African Companies Act, 2008 (the “SA Companies Act”) and will not be distributed to any person in South Africa in any manner which could be construed as an offer to the public in terms of Chapter 4 of the SA Companies Act. These materials do not, nor are they intended to, constitute a prospectus prepared and registered under the SA Companies Act. Nothing in these materials should be viewed, or construed, as “advice” as that term is used in the Financial Markets Act, 2012 and/or the Financial Advisory and Intermediary Services Act, 2001. This announcement and any relevant offer is and will only be addressed to and is and will only be directed at persons in South Africa who fall within one of the categories listed in section 96(1)(a) and/or (b) of the SA Companies Act.
This announcement may include statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements may be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “plans”, “projects”, “anticipates”, “expects”, “intends”, “may”, “will” or “should” or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect Altron’s current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to Altron and/or Bytes Technology Group plc’s business, results of operations, financial position, liquidity, prospects, growth and strategies. Forward-looking statements speak only as of the date they are made. No representation or warranty is made that any forward-looking statement will come to pass.
Notes to Editors:
About Allied Electronics Corporation Limited
South African listed Allied Electronics Corporation Limited (Altron) is invested in telecommunications and information technology, offering ICT services in the areas of cybersecurity, software security solutions, business process outsourcing, skills development, secure transactional solutions, systems integration, cloud computing, managed services, IT infrastructure, electronic component distribution, fleet management, telematics, data analytics, converged and broadband communication services and networks, and the resale of Microsoft software.
The group’s primary focus is in providing innovative solutions in the fintech, healthtech, safety & security, and skills development verticals that have a meaningful impact on society by addressing challenges facing communities in South Africa, the continent and beyond, while delivering shared value for all its stakeholders.
Founded in 1965, Altron has a direct presence in South Africa, the rest of Africa, the UK and Australia through its various businesses. In addition, the group’s strategic partnerships with leading international technology companies gives it access to leading technology capabilities and products from across the world, including Asia, Europe and North America. The majority of the groups revenue and headcount are derived from the local market in South Africa where the group is headquartered. The Altron group employs more than 8 500 employees globally.
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