Business
Allied Technologies negotiates $60 million buyout for Kenyan Tech firm
(Reuters) – South Africa’s Allied Technologies Ltd., is in talks to pay up to US$60 million for unlisted Kenyan IT firm Symphony, according to a person familiar with the matter, to help revive its struggling business in fast growing East Africa.
Johannesburg based Altech, a US$742 million telecoms and IT firm, has been in talks to buy Symphony for several months and is nearing the end of its due diligence, said the source, who declined to be identified because the information is not yet public.
Altech is likely to pay between US $50 – 60 million for Symphony, giving it a price-to-earnings ratio in the teens, the source said.
Buying Symphony, which also has operations in Uganda, Rwanda, Burundi and Ethiopia, would augment Altech’s existing business in a region where it has struggled.
“I think it would be a good fit,” said Dirk Noeth, an analyst with Avior Research in Cape Town.
“It helps them expand their services base from just being a fixed-network provider to a system integrator as well… You need a business like this to really drive it further.”
Altech in September replaced the head of its underperforming Kenyan data unit and named a new team to lead its East African operation. Turning around the East Africa business is a “top priority”, Altech said then.
South African firms are increasingly looking to do deals beyond their crowded home market to tap rising disposable incomes in the fast growing regions such as east and west Africa.
