| Thu 12 Jun 2003, 10:07 | | Beget sells shares to pay for acquisition |
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Information Technology Editor
SMALL-cap technology company Beget Holdings has placed 22,4million new shares with private investors at just 12c each to help it pay for an acquisition and to bump up working capital.
Beget shares were static at 18c yesterday, but the price of 12c was determined in March when it was languishing at about 13c. The influx of R2,69m has let Beget pay R1,68m to the vendors of Ianitor, a business which it bought in February. The remainder will boost its working capital, which according to Beget's maiden results to the end of December stood at only R879727 in cash.
Beget debuted on the JSE Securities Exchange SA last September in the midst of the technology downturn, making it the first and last technology listing for many months.
The company develops database management and e-commerce software, payment software for conducting e-commerce over a cellphone and software to let companies send SMS text messages to their clients.
The new shares were bought by more than 600 buyers, and increased its shares in issue to 374million. While about 20% of the buyers were existing shareholders, the vast majority were investing for the first time, said MD André Potgieter. The shares were distributed through the placement agency, StratEquity.
Potgieter said he was not surprised that so many investors were taking a chance on a small technology company, despite tough conditions in the sector.
"The wheels have come off for just about everybody related to technology, but it is a sound industry and if you have a strong business there is no reason why profits shouldn't be there.
"The GSM industry is booming and the power of SMS text messages makes it the next big wave," he said.
So far, Beget has managed to beat its prelisting forecasts, with its maiden results showing an after-tax profit of R2,1m, up 13% from its forecast of R1,89m. Headline earnings a share of 1,65c were up a fraction from the forecast of 1,62c, with revenue coming in at R4,7m.
The deal to buy Ianitor International saw Beget agree to pay R8m in cash or by way of an issue of its shares at 18c each. But its declining value on the JSE saw the directors issue the latest batch of shares at a lower price than initially envisaged.
Beget said it bought Ianitor because there were strong synergies between them. Ianitor was a Namibian group that developed telecommunications software.
The sum of R320000 was paid on signing the deal and R3m was paid soon after by issuing 16,6million shares at 18c each. Beget must still make a final payment of R3m next year, subject to Ianitor meeting its R9m profit warranty.
Jun 12 2003 07:15:05:000AM Lesley Stones Business Day 1st Edition
