Picture: ISTOCK
Picture: ISTOCK

IT service management company Metrofile has agreed to buy G4S Secure Data Solutions (Kenya) in a deal worth up to 2.1-billion Kenyan shillings (about R281.4m).

The transaction is a strategic move, Metrofile says, that will increase its footprint in Africa and provide it with an expanded international client base, strong management team and local expertise in the records management industry.

Metrofile’s shares gained 2.3% to close at R4.09 in light trading on Monday.

The target firm, also called SDS Kenya, is the largest records-management company in East Africa and is being sold by G4S International Holdings and Nurun Investments.

Metrofile said that the deal was in line with its plans to
build its footprint in selected African countries.

“The board believes that the Kenyan records management market has significant potential for growth and that SDS Kenya is a well-established business that will provide an ideal strategic platform to extend Metrofile’s presence in the broader East Africa region,” the company said.

SDS Kenya operates a records management business based in Nairobi and specialises in corporate archiving and record management.

At the end of October, SDS Kenya’s net asset value was reported to be about R21.2m.

The company’s earnings before interest, taxes, depreciation and amortisation for the 10 months to end-October were about R23m, or R27.5m on an annualised basis.

Metrofile said the transaction would be settled in cash from existing resources and using a loan from Standard Bank.

“The Metrofile board is considering a capital raise of up to R100m by way of an underwritten rights issue to reduce the bank debt utilised to fund the purchase consideration.”

Metrofile, which offers physical storage and digital services, as well as the confidential destruction and recycling of records, has been growing its presence in the Middle East and other African countries.

In the year to end-June, Metrofile’s revenue fell by 1%
to R769.2m while headline earnings increased by 4% to R135.2m. After reaching a high of R5.26 in February, shares in Metrofile have declined through the course of 2017.

hedleyn@businesslive.co.za

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