Pete da Silva

JSE-lsited electronics company Jasco has bought ARC Telecoms for an undisclosed amount, the company says in a statement.

The buyout follows rumours a few weeks ago that the companies were in talks. At the time, Jasco said it would not comment on speculation, while ARC indicated it regularly engaged in strategic discussions with potential partners, but would not comment on rumours.

ARC, formed in April 2010, was funded by majority shareholder World of Avatar venture capitalist, the brainchild of Alan Knott-Craig Jnr, while additional shares were owned by the management team. Jasco, which recently restructured into three units – ICT Solutions, Industry Solutions and Energy Solutions – says the deal will expand its customer base and annuity business. The company said in February it was looking for niche acquisitions for its ICT unit and wanted to expand its voice over IP offering.

ARC Telecoms, which is a converged voice and IP data telecommunications service provider, will be incorporated into Jasco’s ICT solutions unit, which is its largest contributor to revenue.

Jasco CEO Pete da Silva says the buyout is part of the company’s strategic intention to grow through bolt-on acquisitions. He says ARC’s offerings are complementary to Jasco’s current solutions.

ICT Solutions houses the telecommunications and information technology businesses of Jasco and Spescom, as well as the telecommunications arm of associate M-TEC. In the six months to December, it contributed R286.9 million to Jasco’s R493.9 million in revenue.

Da Silva says Jasco now has access to ARC Telecoms’ customer base, which opens up cross-selling opportunities. ARC specialises in small and medium enterprises.