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. <\/p>\n
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. <\/p>\n
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. <\/p>\n
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. <\/p>\n
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. <\/p>\n
The deal is also subject to key Marketel staff signing employment and restraint-of-trade agreements. <\/p>\n
The deal should raise TeleMasters’ headline earnings per share 17,85%, said CEO Mario Pretorius. <\/p>\n
“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. <\/p>\n
“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.” <\/p>\n
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. <\/p>\n
Future acquisitions would include black empowerment investments, said Pretorius. <\/p>\n