Altron acquires Ubusha Technologies for R360m
Ubusha will merge with Altron’s existing Cybertech unit to increase the focus on security
In one of its first major local acquisitions under its new leadership team, technology firm Altron has acquired identity authentication company Ubusha Technologies for R360m, it said on Monday. The deal will increase its focus on security and broaden its customer base.
The transaction, set to be effective from March 1 pending approval by the Competition Commission, will see Ubusha merge with Altron’s existing Cybertech business to form a stand-alone operating company, Altron Security Solutions.
Ubusha, founded in 2003, provides advanced technologies for online identification and authorisation, among other things.
Altron’s CEO, Mteto Nyati, said in a statement that by acquiring Ubusha “we are enhancing our capability in security, one of our growth areas, others being cloud, IOT [internet of things] and data analytics. With identity security offering we will enable customers to securely manage the identity profile of their clients across devices, platforms and locations.”
With a 70-strong workforce, Ubusha is said to be the largest identity security company in Africa. Its key customers include Standard Bank, Nedbank, Absa Bank, First National Bank, JSE, Vodacom, Telkom and Massmart. Internationally, its key clients are Nasdaq, Vitality UK, Investec and Vodafone.
Ubusha has revenues of about R170m, with earnings before interest, tax, depreciation and amortisation (ebitda) of R40m. The market in which it is competing is expected to grow to about $2.1bn, at an annual rate of 21%.
Altron’s security businesses include access security, cybersecurity and its UK operation. Including Ubusha, “we will deliver about R1.1bn in gross revenues, about R780m from the UK and the balance in SA,” said Nyati.
Altron, known for its managed services business, Bytes People Solutions and vehicle tracking unit Netstar, said identity security is an essential foundation for customers’ digital transformation strategies and governance structures.
“Looking at where we are today, transactions have moved online, and the identity profile of an individual has become valuable, driven by privacy concerns. Our customers will now manage identity securely in line with data privacy compliance and governance.”
Ubusha’s MD, Marius Agenbag, said “with Altron’s geographic footprint and extensive customer base, we saw an opportunity to expand our identity security technology solutions into new markets and customer segments. We also looked at the opportunity to mature our offering into other next-generation security services such as data analytics and IOT, which are core to the Altron strategy”.
Nyati and his team have set a target of doubling its ebitda by 2021, having pursued a turnaround strategy since 2017 that has seen it slash headoffice costs and rationalise its business, formerly a family-run affair.
This deal is the second acquisition in SA since Nyati’s team took over more than two years ago. In 2017 Altron acquired Fleet Logistics, an Australian company trading as EZY2C, specialising in fleet management solutions for local government, the car rental industry and commercial customers. Later that year, its Bytes UK unit bought IT reseller Phoenix Software, an end-to-end IT solutions provider. In 2018, the company acquired iS Partners, which included Karabina Solutions, a Microsoft solutions business, and Zetta Business Solutions, which provides data advisory services, for R225m.
Altron shares were down 2.37% at the close of trade on Monday at R23.05, having risen 28% so far in 2019.