Tellumat looks secure

Tellumat looks secure

RETREAT-based technology manufacturer Tellumat might soon get additional security in its operations. Stellar Capital Partners – one of the largest shareholders in Tellumat – recently proposed buying out security technology specialist Amalgamated Electronic Corporation (Amecor.) The deal – depending on profit warranties being achieved – could be worth as much as R268m.

Amecor is a highly profitable and cash generative company that offers a range of exclusive technologies related to security and electronics. Much of its profit line is regarded as annuity income.

In short, Amecor’s core activities comprise the manufacture and supply of sophisticated security transmission technology and applications. The company holds a national distribution arm providing access to Amecor’s suite of security and electronic products. Amecor also owns a licensed radio frequency and GSM global network for data transmission and off site equipment and /or security control.

Due to the unfortunately high levels of crime in South Africa, Amecor pitches its products and services into one of the few growth segments of the local economy.

Stellar has argued that Amecor should be able to collaborate effectively with Tellumat, which also manufactures a range of electronic-based equipment. The big question is whether there are parts of Amecor’s manufacturing operations that could be more effectively undertaken at Tellumat. Certainly this could be the case if Amecor continue to expand its range of security products – particularly since the company has signalled its intentions to seek out newer markets in Africa.

Tellumat recently received a major empowerment boost when Stellar sold down its shareholding to allow Masimong Technologies – headed by the highly regarded businessman Mike Teke – to take 51.1% stake in the company.

It’s worth remembering Tellumat is rated under the ICT Sector Codes for BEE purposes. These sector codes specifically encourage 51% ownership and Tellumat’s key government and parastatal customers have also indicated their intended additional support after the company obtaining this ownership level.

If there is a closer relationship between Amecor and Tellumat then the latter’s enhanced BEE status should allow for the unlocking of new contracts and boost profitability.

By Jenni McCann


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