R5.5bn mobile solutions group Blue Label Telecoms this morning announced the R306m acquisition of nine year old tech company Retail Mobile Credit Specialists (RMCS). The price is based on 9.5 times RMCS’s projected earnings of R32.1m in the year to end August 2014. It will be slightly (5%) earnings enhancing as Blue Label’s current PE is 12.3 times.
RMCS describes itself as South Africa’s largest independent retail mobile service company. It features fairly prominently on the Hellopeter.com consumer complaints website. RMCS provides a virtual store through which customers can buy using existing credit accounts with retailers. It initially sold airtime (Blue Label’s core product) before branching out. RMCS says it services more than 1.1 million mobile subscribers through its retail credit gateways. The business, which will provide additional distribution channels, will be absorbed into Blue Label’s TPC subsidiary. – AH
