Business Connexion strengthens retail competence, concludes R614-million deal

With the completion of its acquisition of selected business units of UCS, Business Connexion is staking its claim as the country’s leading provider of information and communication technologies to the retail sector.

Negotiations which commenced in late 2010 are officially finalised as of this month, with the issue of new shares and the divisions becoming de facto units within Business Connexion.

According to Matthew Blewett, Group Executive: Mergers and Acquisitions at the company, this reflects the culmination of a major strategic thrust by Business Connexion. “The company has long recognised the value of ‘in house’ software intellectual property. The UCS divisions substantially enhance this value while adding further expertise through the services and solutions components of this acquisition,” he notes.

In terms of the transaction, valued at approximately R614-million and financed through the issue of 101 million new shares and R30-m cash, UCS Technology Services, UCS Solutions, CEB Maintenance and UCS businesses Accsys, are now wholly-owned by Business Connexion, which also takes a 70% stake in Destiny e-Commerce.

While Blewett says the conclusion of the deal represents the closure of an intense period of executive planning, he stresses that more work lies ahead. “The new challenge is integration of these assets and people into our existing competency centres to fully expose their value for our clients and for shareholders. The medium-to-long term success of the deal depends on our ability to retain existing clients of both organisations while also expanding the offerings to them and new clients,” he notes.

Specifically, he says a focus is being applied to ensure smooth integration. “From a strategic point of view, these assets will bolster our position in the retail sector. Operationally, considerations include integrating the business systems where appropriate, merging sales teams, activities and establishing processes which take into account the respective strengths of the now-combined organisations.”

He says Business Connexion is aware that the ultimate success of the acquisition lies in the execution of this integration. “Therefore, if anything, the real work starts now.”

What is anticipated is increased competitive value which will result from an expanded solutions portfolio; sales opportunities are likely within existing clients, while the entity has more to offer new clients, too. “There will be an element of economies of scale for our clients which will result from common processes, such as engagement and shared services, within the combined entity,” Blewett notes.

And in addition to the capabilities, he makes special mention of the substantially expanded headcount which now comprises the Business Connexion employee complement.

“Our Connective Intelligence approach is centred on the power of human capability; with these UCS businesses on board, we have more skills, more knowledge and more expertise. That enhances our ability to take information and communication technology and apply it to the advantage of our clients. As we harmonise the acquired businesses with existing operations, our goal is to enhance Connective Intelligence and our competitive advantage.”