Competition Commission approves Reunert’s acquisition of IQbusiness

Reunert has received authority from competition authorities to finalise an agreement to buy almost three-quarters of IT consulting business IQbusiness for an undisclosed amount as the JSE-listed electronics group seeks to broaden its services. 

Reunert, which is valued at about R11bn on the JSE, has operations that include the design and manufacturing of electrical conductors, cables and accessories, as well as ICT-related services for businesses. It also has niche businesses that cover communications and radar systems.

On Monday, the Competition Commission said it had recommended that the Competition Tribunal — the final authority and enforcer of competition matters in SA — approve the transaction without conditions.

In a statement, the Commission said it found the proposed transaction “is unlikely to result in substantial prevention or lessening of competition in any relevant markets. The Commission further found that the proposed transaction does not raise substantial public interest concerns.”

The deal is for a 74.2% stake in IQbusiness, one of SA’s largest management and technology consulting firms. It generates more than R1bn in revenue and employs more than 1,000 people offering insights, consulting and contracting across consumer convergence in the financial services, retail and telecommunications sectors and the manufacturing industry.

Earlier in the year, Reunert said joining forces with IQbusiness “aligns to our strategic intent to create the leading SA ICT company and provides offerings and capabilities in business optimisation, solutions and systems integration focusing on digital business transformation through data science, cloud adoption, artificial intelligence, cyber security and the internet of things”.

The transaction will boost Reunert’s delivery of end-to-end technology solutions to its 40,000 clients across industries in multiple countries.

The group — established more than 130 years ago — has three segments: electrical engineering, which includes power and telecom cables; ICT; and applied electronics, which includes renewable energy solutions and radars.

This comes as Reunert reported a jump in interim profit last week thanks to record sales of its renewable power products spurred by SA’s energy crisis.

The group’s applied electronics segment had a strong first half. Revenue was up 49% to R1.6bn and operating profit almost trebled to R163m, driven by strong exports and demand for its renewable energy products.

Group profit for the six months to end-March rose by almost a third to R422m and it announced an interim dividend of 83c a share, an increase of 10.7% from a year earlier.

gavazam@businesslive.co.za