Johannesburg - The Connection Group on Tuesday said it had sold its 83.7% holding in Ultimate Connection to UCS Group for R18.3 million, to enable it to concentrate on its retail business.
The disposal includes R1.57 million in cash as well as the assumption by UCS of Ultimate Connection's overdraft
of R16.7 million. In addition, should Ultimate Connection's performance over the next 12 months exceed forecast, Connection Group will be paid an additional amount of up to R4 million.
The sale means the Connection Group has eliminated all
debt and will be in a positive cash position.
Three years ago, the group encountered serious difficulties and was burdened with debt of over R100 million. Today it is profitable, with a strong balance sheet.
Connection Group CE Pierre Joubert said Ultimate was an exceptional company but it fitted better into UCS, which,
like Ultimate Connection, specialises in software.
"We sold it to focus on retail, to improve our cash position and strengthen our balance sheet."
Incredible Connection has 26 stores offering a wide variety of
IT products in all the main centres. It holds 45% of the
retail market. It intends to open four more stores in the current financial year and another five in 2004.