Nearly a year after a takeover that led to its delisting from the JSE, technology group Adapt IT says it is ready to get back to its strategy of growing its operations through acquisition.
Earlier in August, the company acquired a Mauritian-based software business that serves the hospitality sector.
After more than a decade as one of the few listed software companies on the JSE, Adapt IT, delisted after its takeover by Canada’s Volaris.
Volaris, which specialises in acquiring software businesses, has operations in more than 35 countries and is a wholly owned subsidiary of Canada-listed Constellation, a $45bn (R694bn) technology giant. The Canadian group won a bidding war against local player, Huge Group, walking away with about 64% of Adapt IT.
“We’re nearly eight months post acquisition. We’re close to being done with integration, which puts [us] on the front foot with regards to having a clear way forward for the M&A strategy,” Adapt IT CEO Tiffany Dunsdon told Business Day on Tuesday.
The acquisition by Volaris resulted in a diversified SA software company being backed by a well-capitalised leading global technology firm that is keen to support further growth. Adapt IT now represents Volaris’s interests in Africa, where it sees opportunities for growth.
“We’ve aligned with Volaris, we have a clear mandate and understand what we’re looking for. We’ve got the balance sheet, the full backing [of Volaris] and access to more firepower,” said Dunsdon.
In early August, Adapt IT said it had concluded a transaction with Mauritian-based hospitality software provider Agileum to acquire its business in the region.
The transaction includes the rights to service the Indian Ocean hospitality market on behalf of global tech giant, Oracle.
Adapt IT is looking to integrate this business into its existing hospitality unit, Micros SA, which services 3,500 restaurants and 700 hotels.
Dunsdon said the deal made sense as Micros SA and Agileum’s businesses were similar, just in different territories. She said Adapt IT had a good relationship with Agileum, which helped to cement the deal.
“Time in the market and long-term commitment placed us really well, together with our deep relationships, where we had actually worked with Agileum, partnered on certain deals, and assisted them on certain things. Over time, when they decided to consider divesting of this business, we were a natural party to talk to.”
Adapt IT has clients in education, hospitality, manufacturing, financial services, telecom, energy and the public sector, but Dunsdon says the group is open to getting into new sectors. That said, the priority is on growing existing segments in its business.
“Additional IP [intellectual property] and solutions for existing markets is clearly a ... priority. I will say [that] we’re very much opened regarding new verticals. We’re not limiting ourselves to existing verticals at all.”
Adapt IT has seen the most growth from education, owing to increased technology use by learning institutions during the Covid-19 pandemic. Growth has also come from telecom clients, given increased demand for communications services.
Dunsdon thinks these trends have a permanent effect on demand and consumption patterns, which benefits Adapt IT’s business.
In September, Dunsdon took over as CEO after the departure of scandal-tainted Adapt IT founder Sbu Shabalala. Though happy to have largely worked in the background over the past decade, she was CEO of InfoWave Holdings when she engineered the merger with Shabalala’s fledgling Adapt IT in 2007 that created the tech firm.
Adapt IT was founded in 1996 and listed on the JSE in 1998. It has grown its customer base to more than 10,000 in 55 countries.
Correction: August 30 2022
An earlier version of this story said Volaris holds 54% of Adapt IT when it should have been 64%.
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