Three years after Volaris took over Adapt IT’s business in a transaction that valued the SA company at more than R1bn, its Canadian parent has made use of a number of the SA company’s leaders to drive its acquisition strategy in the Middle East and Africa.
For more than a decade Adapt IT was one of the JSE’s few listed software companies, dropping off the bourse after the takeover in January 2022.
Volaris, which specialises in acquiring software businesses, has operations in more than 35 countries and is a wholly owned subsidiary of Canada-listed Constellation, a $102bn (R1.9-trillion) technology giant.
The Canadian group won a bidding war against local player Huge Group, walking away with about 64% of Adapt IT.
The acquisition resulted in a diversified SA software company being backed by a well-capitalised leading global technology firm that is keen to support further growth.
Adapt IT, now part of the Canadian firm’s Omegro portfolio, represents Volaris’s interests in Africa where it sees opportunities for growth.
The firm is now leaning more into that experience in the region to bolster its local acquisition team.
The group announced that Tiffany Dunsdon, who has been at the helm of Adapt IT since late 2021 as CEO, has been appointed as acquiring group leader for Middle East and Africa (MEA) for Omegro.
Adapt IT’s CFO, Nombali Mbambo, has been appointed as group finance director for MEA at Omegro. This role includes broad oversight and governance of Adapt IT.
COO Tony Vicente has been appointed CEO of the SA software company.
Dunsdon told Business Day that a big part of her new role was looking for and engaging with possible acquisition targets for Volaris, through Omegro. The group is specifically looking for mature software business in which to invest in, as it did in Adapt IT.
Such companies, Dunsdon says, may have been through rounds of funding from venture capitalists and private equity over their lifetime, which is different from the Volaris strategy of holding on to its investments for the long term and not selling.
“We don’t provide growth equity. We prefer mature businesses in vertical market software. Mature businesses which have deep IP [intellectual property], which is really valuable to their customers,” she said.
Vertical market software refers to programmes and solutions created for a specific industry or market. An example is a company making software only for human resources (HR) needs.
“The other thing is management don’t have to exit. They can exit their shareholding, but they can stay and run their business to the next level. Typically with financial buyers, there may well be changes in leadership because there’s a time-bound exit horizon.
“So if leadership don’t want to exit their day job, they can stay and grow with us and enjoy the adoption of the best practices and the peer-to-peer network and even their own career growth. In fact, if they are running a strong business, they can also become acquisitive once they’re in our stable, and we provide capital for that growth as well.”
An entrepreneur herself, Dunsdon was CEO of InfoWave Holdings when she engineered a merger with Sbu Shabalala’s fledgling Adapt IT in 2007.
Adapt IT was founded in 1996 and listed on the JSE in 1998. At delisting, it had grown its customer base to more than 10,000 in 55 countries.
In August 2022, the company acquired Agileum, a Mauritian-based software business that serves the hospitality sector, for an undisclosed sum.
Source: BusinessDay