Labat Africa Group, which previously focused on cannabis sector investments, is now pivoting to technology. and it has entered into a R2.5 billion royalty distribution agreement with Ubits Technology Solutions.

The management team at Labat said on Wednesday that the transaction represents a “significant development that will further enhance Labat's growth trajectory in the technology and AI sectors.”

On March 4 this year, Labat successfully completed the acquisitions of 75.55% of Classic International and 51% of Anahmu Investments. These acquisitions aim to strengthen Labat's position in the rapidly evolving technology sector, particularly within AI and innovations.

“In line with the new journey of Labat, we are excited to announce that Labat has entered into a landmark R2.5bn royalty distribution agreement with one of the leading fintech companies,” Labat’s directors said in a statement.

Ubits Technology Solutions specialises in providing turnkey ICT (Information, Communication, and Technology) solutions to the global banking and financial sector, a field that is rapidly transforming with the integration of advanced technologies, according to Labat’s directors.

Ubits adds value across the ICT value spectrum with bespoke solutions for their blue-chip client base, as stated in their announcement.

“Our commitment to cybersecurity and compliance ensures robust protection for your digital assets, while our innovative solutions leverage IoT and renewable energy to drive operational excellence,” the statement continued.

In software development, the company crafts customised applications and fintech solutions, including a core banking platform known as Payflo.

Under the terms of the royalty agreement, Labat will service Ubit clients with their solutions across all systems and ICT solutions.

Ubits has committed to a five-year term with Labat via the agreement that includes Classic and Ahnamu.

“This agreement is expected to generate substantial value for Labat and its shareholders, contributing significantly to our long-term vision in the financial and technology sectors,” Labat’s directors said.

Labat also announced Wednesday that it had completed the share transfer for the acquisition of Anahmu Investments.

On March 4, shareholders were advised that Labat would issue 200 million Labat Africa shares at an issue price of R0.10 per share, representing a premium of 25% compared to the trading share price of 0.08 cents per share.

On Wednesday, Labat confirmed that it had successfully acquired Anahmu Investments and that the transfer of the 200 million shares had been completed.

“The acquisition aligns with our long-term objectives and is expected to contribute positively to our financial performance. We appreciate the continued support of our shareholders and stakeholders as we integrate Anahmu into our operations."

Following the issue of shares to Ahnamu, Labat Africa’s share capital has increased to 113 million shares. Labat's share price was untraded at 6 cents on the JSE yesterday.

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Labat Africa pivots further into technology with R2. 5bn royalty agreement