A considerable market excitement followed an acquisitive announcement by JSE listed firm Blue Label Telecoms on the eve of Christmas.
Blue Label announced that it was set to acquire telecoms and business solutions provider RMCS for about R330 million. The deal promises to boost Blue Labels’ reach within the virtual retail market which is said to be conservatively worth about R50bn a year and growing.
Blue Label is in the business of “virtual distribution of secure electronic tokens of value” with operations across . It is predominantly active in the prepaid airtime and is also in the transactional services spaces. RMCS provides telecom based retail solutions for traders across the country.
On the day of the announcement, the 24th of December 2013, Blue Label shares rose 2.2% or 18c to close at R8.10 per share.
The announcement said Blue Label has reached an agreement with RMCS shareholders to acquire 100% of the company.
“The purchase consideration is the sum of R306 588 511 and, subject to certain earnings targets being achieved during the 12 month period ending 31 August 2014, an additional amount not exceeding R32 141 276.” The deal is subject to a number of suspensive conditions including regulatory approvals.
The RMCS selling shareholders are Pharaoh Limited, The Karoobos Trust, The Rooibos Trust, Adam Greenblatt, Bradley Ivan Kark, Keith Larry Brouze, Michael Roffey, Ran Goldstein, Shaun Hurwitz and Terence Nicholas Lazard and in terms of which TPC will acquire 100% of RMCS’s issued share capital.
RMCS is an enhanced service provider of cellular products and services engaged in the supply of telecommunication products and services, content, data and allied activities via both physical and virtual mediums. The physical presence is in the form of stores and the virtual offering is in the form of an “Over the Air” cellular application which enables retailers, credit providers and consumers to communicate and transact over their mobile devices.”
The acquisition of RMCS gives TPC access to new channels for the distribution of both RMCS and Blue Label products and services.”