JSE-listed technology group Alviva Holdings said on Friday that has reached an agreement to acquire 70% of business software specialist SynergERP. The deal is being done through its subsidiary DCT Holdings.

At the same time, the group, through its subsidiary Alviva International Investments, will buy 51% of Synerg in the United Arab Emirates and Synerg UK.

The Synerg Group consists of five trading companies: Synerg South Africa, including subsidiaries SynergIT and Synerg300, plus the operations in the UAE and the UK. It was established in 1993 and is a reseller for Sage.

“The business is currently dedicated to the Enterprise Management Software suite (also known as Sage X3 and Sage X3 People) and supports global organisations through its offices in South Africa, the UK and the Middle East,” Alviva said in a statement to shareholders.

“The business is invested in the Sage Enterprise product stack and has one of the largest complements of certified consultants in Africa. As a business, they are closely aligned with Sage and Sage’s strategic growth areas, enabling them to stay up to date with the latest initiatives and focus areas.”

Alviva said a key focus of its acquisition strategy is to increase its exposure to the IT services and solutions space.

The Synerg South Africa purchase price is R90.1-million (subject to adjustment) payable in cash in two instalments of R63.1-million on 1 July and R27-million. The R27-million is subject to a price-adjustment formula linked to the profits achieved in the financial year ending 31 December 2019. The second payment will be made on the completion of the 2019 audited accounts. The maximum purchase price payable by DCT for the 70% stake in Synerg SA is R108-million.

Option

The purchase prices payable by Alviva International for the stakes in Synerg UK and Synerg UAE will only be calculated and paid following the completion of their audited accounts for the year ending 30 June 2022 (payment must be made on or before 30 September 2022).

The purchase prices will be based on a price-earnings multiple of 9.1x of actual profits achieved. Maximum purchase price for Synerg UK is £2.7-million (R51.7-million) and Synerg UAE is AED12.8-million (R52.3-million).