SOUTH AFRICAN FARITEC BRUSHES OFF TARGET'S LEGAL WOES
Technology company Faritec's R54m acquisition of black-owned Enterprise Connection will not be affected by legal action that has been instigated against the target company.
A notice issued by Faritec on Friday had triggered some calls to the company by investors concerned that the legal action would affect the deal, said Faritec CEO Simon Tomlinson.
Tomlinson said the technology rental financing company that brought the action had insisted that the notice was issued on the JSE's news service to embarrass the company so as to force it to settle the dispute.
The dispute involves less than R1m and was fully disclosed to Faritec when it negotiated the takeover of Enterprise, which supplies technology equipment to corporate clients.
"The rental financing company says it has a claim against Enterprise and that has been excluded from our deal. It will have no impact on Faritec whatsoever because we are buying the business out," Tomlinson said.
If there was a valid claim to settle, it would be the responsibility of Enterprise shareholders in their personal capacity, he said.
An interim court order obtained by the claimants against Enterprise prevents the takeover from being concluded before May 30.
Since the move would only come up for approval by shareholders and the Competition Commission at the end of next month, the legal action should not create a hold-up, Tomlinson said.
The main shareholders in Enterprise are its CEO Paul Moses and four black businessmen trading as Canal Square Investments with 50%.
Once the deal is concluded, it will almost double Faritec's staff size, expand its offerings, and boost its empowerment profile. Tomlinson said plans to integrate the operations were going well. Faritec's share price was unchanged on the JSE on Friday.