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[2014] ZACT 21
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MB Technologies Investments (Pty) Ltd v Securedata Holdings Ltd (018408) [2014] ZACT 21 (4 April 2014)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: 018408
In
the matter between:
MB
TECHNOLOGIES INVESTMENTS (PTY) LTD
Primary Acquiring Firm
AND
SECUREDATA
HOLDINGS
LTD
Primary Target Firm
Panel
:
DrTakalani Madima (Presiding Member) Prof Imraan Valodia (Tribunal
Member) Anton Roskam (Tribunal Member)
Heard
on Order
:
26
February 2014
Issued
on
:
26
February 2014
Reasons
Issued on :
4 April 2014
Reasons
for Decision
Approval
[1]
On 26 February 2014 The
Competition Tribunal (“the Tribunal”) unconditionally
approved the acquisition of SecureData
Holdings Ltd by MB
Technologies Investments (Pty) Ltd.
[2]
The reasons for approval of the
proposed transaction follow below.
Parties
to the Transaction
Primary
acquiring firm
[3]
The primary acquiring firm is MB
Technologies Investments (Pty) Ltd (“MB Technologies”), a
company incorporated in terms
of the laws of the Republic of South
Africa. MB Technologies is controlled by Investec Bank Limited
(“Investec Bank”)
which is in turn controlled by Investec
Limited (“Investec”), a company listed on the
Johannesburg Securities Exchange
(“JSE”). Investec’s
largest shareholders are as follows:
•
Public
Investment Corporation;
•
Investec
Staff Share Schemes;
•
Old
Mutual;
•
Old
Mutual Group; and
•
Alan
Gray.
[4]
MB Technologies controls and wholly
owns the following firms:
•
Advanced
Channel Technologies (Pty) Ltd;
•
Channel
Capital (Pty) Ltd;
•
Channel
Risk Management (Pty) Ltd;
•
Channelware
(Pty) Ltd;
•
Tarsus
Technologies (Pty) Ltd;
•
Printacom
Technologies;
•
MBT
Secretarial Services (Pty) Ltd; and
•
MBT
Services (Pty) Ltd.
Primary
target firm
[5]
The primary target firm is
SecureData Holdings Ltd (“SecureData”), a company
incorporated in terms of the laws of the
Republic of South Africa and
listed on the JSE. SecureData directly controls the following
subsidiaries:
•
SecureData
Administration (Pty) Ltd;
•
ScureData
Continuity (Pty) Ltd; and;
•
SecureData
Security (Pty) Ltd.
[6]
The five largest shareholders of
SecureData are as follows:
•
360
NE Asset Management (Pty) Ltd;
•
Treacle
Investments (Pty) Ltd;
•
Rhys
Summerton;
•
Treacle
Fund II Trust; and
•
Golden
Hind Partnership.
Proposed
Transaction
[7]
The proposed transaction is
structured as a Scheme of Arrangement in terms of
section 114
of the
Companies Act 71 of 2008
and a delisting. The first step in the
transaction involves MB Technologies acquiring the entire issued
share capital of SecureData.
The second step involves SecureData
delisting from the JSE. Postmerger, MB Technologies will hold
the entire issued share
capital of SecureData and will control
SecureData.
Rationale
[8]
MB Technologies views the
proposed acquisition of SecureData as an attractive business
opportunity which is likely to increase diversification,
synergies
and lead to cost saving.
[9]
SecureData is of the view that the
specific business areas of the merging firms complement one another
in that MB Technologies will
play a role in driving SecureData’s
strategy going forward. It also provides SecureData’s
shareholders with a cash
exit opportunity.
Relevant
Market and Impact on Competition
[10]
SecureData is operative in the
information security sector, specifically as a distributor and seller
of risk management solutions.
MB Technologies, also operating in the
IT sector, focuses rather on the sale and distribution of IT
equipment. There thus exists
a horizontal overlap in the nationai
market for the distribution of information security products within
the information Technology
("IT”) sector.
[11]
Post-merger the merged entity will hold
a market share of about 20% (MB Technologies, the acquiring firm,
holds less than 1% market
share) and will remain constrained by other
information security distributors such as Westeon (35%), Axiz
Workgroup (20%), Unlimited
Networks (10%) and others.
[12]
The presence of viable alternative
players in the market and the relative homogeneity of the product
provide customers with a certain
degree of countervailing power and
this further militates against competition concerns.
Public
Interest
[13]
No public interest concerns arise from
the proposed transaction.
Conclusion
[14]
In light of the above I conclude that
the proposed transaction is unlikely to substantially prevent or
lessen competition In the
national market for the distribution of
information security products within the IT sector.
Accordingly,
I approve the transaction unconditionally.
4
APRIL 2014
DATE
Dr
Takafanl Madima
Prof
Imraan Valodia and Anton Roskam concurring
Tribunal
Researcher: Derrick Bowies/ Shannon Quinn
For
the merging parties:Natalie von Ey- Cliffe Dekker Hofmeyr Inc
For
the Commission:Tshegofatso Radinku