Picture: ISTOCK
Picture: ISTOCK

Ayo Technology Solutions, which raised R4.3bn when it listed on the JSE in December, has already identified a number of potential acquisition targets in SA, says Khalid Abdulla, CEO of African Equity Empowerment Investments (AEEI), which holds 49% of Ayo.

"We’ve got quite a few companies targeted or earmarked for acquisition over the next three, six or 12 months, and we will obviously make sure we don’t overpay for them," Abdulla indicated in a wide-ranging interview on Wednesday.

The company aimed to pay in the range of four to six times earnings for its targets, or more if the company was a good strategic fit, and would avoid issuing too many new shares so as to protect shareholder value.

Ayo’s funding reserves and black empowerment credentials would help it to "negotiate better deals", said Abdulla, adding that the company would spend most of its new war chest on acquisitions and other growth opportunities. It was interested in information technology services companies, "sustainable" firms with meaningful intellectual property ownership and those "that can contribute to the continent as well".

Ayo received commitments for shares from invited investors worth R5.3bn in December but decided to cap the capital raising at R4.3bn to avoid dilution and idle cash, Abdulla said.

The company debuted on the JSE with an inferred market capitalisation of R14.7bn. Its illiquid shares have since edged slightly lower, from R44 to R43.

Ayo is in the process of acquiring AEEI’s 30% stake in British Telecommunications Southern Africa (BT).

The stake was recently valued at R1bn.

This will help it to bid for work under the government’s National Health Insurance (NHI) scheme, according to Abdulla.

"We’re very well placed – I believe that we [Ayo’s Health System Technologies unit] are probably number one, two or three in the hospital systems business in SA.

"The NHI obviously needs a hospitals system before it is implemented, so we are positioning ourselves to take advantage of that.… BT has been a big partner in the National Health Service in the UK, so with our partnership with BT that’s an area of significant growth."

Further, the country’s healthcare operators remained reliant on paper records, and tenders were expected for new hospital information systems.

Meanwhile, Abdulla said AEEI might consider separate listings for other group companies in the future. The group also listed Premier Fishing and Brands in early 2017.

However, it would first spend a year or two "on consolidation — making sure that we live up to our promise to shareholders that we spend the money wisely, not in a hurry, like we did in fishing".

AEEI’s share price has risen about 90% since Premier’s listing 10 months ago.