Picture: ISTOCK
Picture: ISTOCK

Ayo Technology Solutions said on Tuesday its acquisition of Sizwe Africa IT Group would double its revenues.

This is Ayo’s first major acquisition since the company listed in December.

The firm has struggled to finalise deals amid negative reports about its lofty listing valuation and its ties to the Public Investment Corporation.

The company said on Monday it would fall well short of its initial earnings projections for the year ended August.

Ayo would buy 55% of Sizwe for about R165m. Sizwe offers various information and communication technology (ICT) services, including metro and long-distance optic fibre, networking and security to hosting, storage server processing, and data-centre services.

"It is anticipated that Ayo’s investment into Sizwe will have a payback period of three to five years on moderate forecasts," Ayo said.

Acting Ayo CEO Naahied Gamieldien said "the transaction is significant for Ayo … and is in line with its strategy to use group synergy to create stakeholder value through innovative products and services".

Sizwe was expected to generate R1bn in annual revenues, Gamieldien said.

Ayo’s only other major win since listing is the signing of a multiyear ICT services contract with Sasol.

The implementation of the contract was delayed by several months due to negative reports about Ayo at the time, Business Day understands.

In August, Ayo and a major shareholder, African Equity Empowerment Investments (AEEI), said they had run out of time to transfer shares in British Telecommunications SA (BTSA) between themselves. Ayo had previously agreed to buy AEEI’s 30% stake in BTSA for R990m. The companies are in talks to have the agreement restored.

Not long after the BTSA deal lapsed, Ayo CEO Kevin Hardy and chief investment officer Siphiwe Nodwele resigned.