Pinnacle makes offer to purchase Axiz

[Drakonis]

But what does it all mean?

Pinnacle Technology Holdings Limited (PTH) has made an offer to purchase 100% of shares in Axis Technology (Pty) Ltd. Pinnacle’s aim is to merge its solution focused distributor with Axiz which according to Worgroup MD Doug Woolley will allow Worgroup to expand into new markets as well as provide Axiz with Workgroups solution expertise

[Xiphan]

Pinnacle takes out Axiz for R170.9m
The deal will create SA's largest channel-focused company.

JSE-listed Pinnacle Technology Holdings (JSE:PNC) is buying Axiz Technology, in a deal that will create SA's largest channel-focused company.

Pinnacle says it will buy out Axiz's shareholders, which include staff and management, for R170.9m. This announcement comes about four months after Axiz scuttled rumours of a possible takeover, when it said in April that there was no formal offer on the table.

The JSE-listed company's first cautionary, alerting shareholders to the fact that it was in discussions, was issued on 14 May and reiterated on 23 June. In April, rumours suggested Axiz may be bought out by PostNet parent company OneLogix, or Pinnacle subsidiary Pinnacle Africa.

Axiz has just over 300 staff members, and provides hardware, software and its own brand, Axiz. It resells for several major brands, including LG, HP and Samsung.

Pinnacle offers brands such as Apacer, CA, Canon, Dell, Hewlett-Packard, IBM, Intel, LG, Logitech, McAfee, Microsoft, Modrac, Novell, Samsung, Sony and VMware, along with its own Proline range of ICT equipment.

Axiz CEO Anthony Fitzhenry says the merger will make the combined entity the largest channel-focused company in SA, both in terms of revenue and product range.

Pinnacle and Axiz's competitors include Mustek (JSE:MST), which houses Rectron; Tarsus Technologies, which is owned by private company MB Technologies; and Sahara.

Pinnacle has a market capitalisation of R804.5 million, and its nearest listed competitor, Mustek, is valued at R432.7 million, based on its share price and the number of shares in issue.

Fujitsu, Sharp and Samsung were recently added to Pinnacle's portfolio, which will grow its penetration in the data centre, audio-visual and office automation market segments.

Pinnacle CEO Arnold Fourie previously said there are more opportunities to expand into office automation, point-of-sale devices and digital security.

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