BEE tech giant to take a breather following acquisition spree, focusing on consolidation `till financial year-end, says new EO Mohammed Varachia DESCRIBED BY ONE observer of the JSE`s junior market as the king of the AltX acquisition trail, listed technology company Simeka Business Solutions Group (BSG) has yet to reach the top of the hill.

Mohammed Varachia, the new CEO of the former Xantium Technology Holdings, informs iWeek that, in its quest to be an "end-to-end cradle-to-grave" solution provider, it still has a few pieces missing from the puzzle. Application implementation, particularly ERP, information security, document management and call centre solutions being the main parts.

"We`re pursuing an acquisitive and organic growth strategy to fill these gaps, but our short-term aim remains bedding down the current organisation," he says.

Xantium`s beginnings can be traced to its listing on the AltX in August 2004. It didn`t wait long to begin its acquisition spree - the following month it bought Spec Systems, a leading provider of barcode, label and PVC card solutions to the government and private sectors. In March 2005 it bought Waymark Consulting (renamed Xantium Data Solutions), a specialist in Oracle applications for government. Then in April 2005 it snapped up Foster-Melliar, a specialist in IT training and an industry leader in Information Technology Infrastructure Library (ITIL). That same month it also added ITQ and Finfleet, which offer bespoke software development and packaged fleet management and leasing solutions, business intelligence and datawarehousing services, to the group.

Early this year it finalised the acquisition of Simeka Consulting, a black management consultancy servicing government and the telecoms sector.

It is still awaiting approval of its acquisition of Sifikile Procurement Services (now MICT VAR), specialising in delivering managed procurement services to a corporate client base, announced in November last year.

Then Xantium morphed into one of the largest black-owned and controlled ICT solution providers in SA and the third-largest company on the AltX when it merged with Varachia`s MICT Solutions Group and Motomo Mithratech in January.

MICT focuses on maintenance partnership agreements with over 30 OEMs including Epson, Fujitsu Siemens, HP, Packard Bell, Samsung and Sony. Mithratech specialises in secure card solutions for the telecoms industry.

The merger effectively took Xantium from a 45% BEE shareholding to Simeka BSG`s 58% black ownership and, following a restructuring, Xantium`s board will be 90% black. Varachia replaced Xantium founder and joint CEO James Murray, who remains with the group as an executive director. Former North-West Premier Dr Popo Molefe will chair the new group, as he did Xantium.

"The challenge for the next 12 to 18 months, or at least up to our financial year-end, is the integration of all our businesses and ensuring that there`s cross-selling between them," notes Varachia.

With the assimilation of top-level management to be concluded shortly, he is also hoping to physically integrate the companies into a single head office by September, and then consolidating its countrywide presence. It currently has some 1 100 permanent staff based in the country`s major centres.

At the same time, the group is also looking to strengthen its presence further into Africa. Simeka BSG is eyeing the multitude of opportunities in Botswana, Mozambique, Nigeria and Tanzania in particular, he admits.

"When and where it makes sense, we would consider strategic partnerships with companies who know the industry in these countries."

With January`s mergers and acquisitions not reflected in the company`s interim results to November, Varachia is confident that they should boost its revenue to more than R300 million come year-end, trebling its current revenue.

"With our new BEE status, we are ideally positioned to capitalise on significant ICT spending in both the private and public sectors, however the strength of the group is in its diversification." Simeka BSG`s subsidiaries focus on the financial services, telecoms and technology, mining and public sectors.

"The technology market is very dynamic, and we need to be flexible enough to adapt to it, particularly to the price pressures on the commodities and services side," he remarks.