Competition Commission approves Reunert’s acquisition of IQ business

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.

Operations of Reunert, valued at about R11bn on the JSE, include design and manufacturing of electrical conductors, cables and accessories, ICTrelated services for businesses and communications and radar systems niche businesses.

The Competition Commission said on Monday it recommended that the Competition Tribunal, the final competition authority and enforcer, approve the deal without conditions.

The Commission said in a statement that it found the proposed transaction “unlikely to result in substantial prevention or lessening of competition in any relevant markets” and that it “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 consultancies. 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 radar.

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% at 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.