Second buy for telecoms company
Its shares had closed at 161c on Tuesday and quickly reached a temporary high of 222c yesterday, although that is still well down from a 52-week high of 350c.
TeleMasters is chasing acquisitions to evolve into a communications management company using a variety of technologies to improve the efficiency of voice and data services for its clients.
Marketel has a licence to provide value-added network services and is a Wasp — wireless application service provider — suppling mobile content to Vodacom and Cell C.
It is owned by a holding company, Daisy Street, which will sell the business for R12,2m in cash and for 11,5-million new TeleMasters shares at an average of R1,50 each.
Daisy Street has guaranteed that Marketel’s after-tax profit will be at least R6m a year for the next three years, or the purchase price will be lowered.
The deal is also subject to key Marketel staff signing employment and restraint-of-trade agreements.
The deal should raise TeleMasters’ headline earnings per share 17,85%, said CEO Mario Pretorius.
“The market conditions for mergers and acquisitions is not ideal, but it also presents interesting opportunities for a company like TeleMasters, which has positive cash flow and extremely low debt levels,” he said.
“We are able to act more swiftly than most to take advantage of conditions, while having a 40% dividend policy makes TeleMasters shares an attractive proposition for investors.”
This is the second deal of the week for TeleMasters, which also bought a least-cost routing business from Motion Telecommunication for an undisclosed amount.
Future acquisitions would include black empowerment investments, said Pretorius.
Loading ...