JSE praise for AEEI for its second 2017 listing
THE LISTING of AYO Technology Solutions on the JSE yesterday saw the firm becoming the largest listed BEE information and communication technology (ICT) group in South Africa with a market capitalisation of R14.7 billion.
The company has now set its sights on capturing more than 5 percent of the ICT market share within five years.
AYO chief executive, Kevin Hardy, said the company had the opportunity to forge a new path for South African technology companies into Africa and beyond.
“With AYO, we have built a very clear proposition that, while servicing the needs of people today, has the proven ability to innovate and deliver on what the future will determine,” Hardy said.
“AYO intends to maintain the provision of excellent service delivery to clients, staying ahead of the technology curve and fostering a strong environment within all our businesses with very good growth prospects in the medium to long-term,” he said.
AYO, which was formed in 1996, holds key value-added reseller or supplier agreements with principles such as Nokia Siemens Networks South Africa, InterSystems Corporation, Cisco Systems, Microsoft Corporation, IBM and Riverbed Technology, which provides the group with continuous access to up to date technology.
AYO’s product and service offerings include business process management, big data analytics, data security, software development, internet of things solutions and cloud services.
AYO also holds a 30 percent stake in British Telecoms SA.
Hardy, a seasoned and respected ICT professional is the former managing director of British Telecoms Africa.
AYO on Monday confirmed irrevocable commitments for shares from invited investors to the value of R5.3bn, comfortably more than the R4.3bn it aimed to raise in the private placement.
AYO, which is a spin-off of African Equity Empowerment Investment (AEEI), is the 12th software and computer services company to list on the JSE.
This sector has a total market capitalisation of almost R28bn, constituting 0.2 percent of the JSE’s total market capitalisation of R15.3 trillion.
Donna Nemer, the director of capital markets at the JSE, said it was significant that AYO’s private placement was significantly oversubscribed.
“The fourth industrial revolution is gathering pace and creating new opportunities for companies able to harness the power of technology to gather and share data in new ways,” she said.
Ayo is at least 30 percent owned by women.
The company has grown significantly over the past few years, with a substantial 182 percent increase in growth in revenue during the last financial year.
The company was valued at R2.2bn at the end of the interim to February 28.
Khalid Abdulla, the group chief executive of AEEI, said AYO’s successful listing marked a milestone in the group’s Vision 2020 strategy.
“This is the largest capital raising exercise that the group has achieved to date and we are proud to be on track with our ground-breaking achievement,” Abdulla said.
Organised labour including the South African Clothing and Textile Workers Union, the Police and Prison Civil Rights Union and the Federation of Unions of South Africa are AEEI shareholders.
George Sebulela, the secretary-general of the Black Business Council, called on the government to open its procurement spend to blackowned companies such as AYO.
“We have always made an appeal that we would like to see more of black-controlled businesses receive government contracts, the large portion of government multi-billion rand procurement should be chanelled to businesses such as AYO,” Sebulela said.
He added that the government and corporate support in black-owned firms on the JSE was paramount to avoid the troubles experienced by the Gijima group, a black-owned IT firm.
In 2015, Gijima left the JSE after 15 years as a listed entity.