Author: Khaya Buthelezi
In Johannesburg today, the Lebashe Investment Group announced entering into binding long-form agreements with EOH, increasing the maximum cash injection into the technology group from the previously announced R250 million to R1 billion.
The shareholding acquired through the capital injection, along with the 40 million A shares to be issued will make EOH, by a significant margin, Africa’s largest listed and empowered information technology group.
“With 13 000 staff members, over 5 000 large enterprise customers across all major industries throughout South Africa, Africa and the Middle East, 134 locations in South Africa, 36 international points of presence and R17billion in revenue, EOH is an ideal company for us to partner with in terms of our aim to invest in corporations where we are able to play a role in the unlocking of deep value – to transform the entity and catapult it into an African technology and industrial giant.”
“We are committed to the EOH strategy of leveraging and scaling independent reputable business brands that will each forge a new path toward building a technological infrastructure ecosystem that will be invaluable in propelling Africa into the fourth industrial revolution and putting Africa on the global stage,” said Tshepo Mahloele, Chairman of Lebashe.
Speaking from Lebashe offices in Sandton, Tshepo Mahloele, said: “Following the publication of the initial announcement in March, we continued to deeply engage with EOH in proactive and constructive discussions regarding the transaction and ways in which the parties could enhance the benefits of such an important transaction, for all stakeholders. As Lebashe we agreed with EOH that their growth aspirations would be best served by a significant equity injection, as opposed to the previously proposed R3bn debt funding facility.”
“As Lebashe, we are in a unique position to be able to fund this transaction from our own balance sheet and thus achieve a landmark Black Economic Empowerment transaction within the ICT industry, aligning ourselves directly to the shareholders and we hope shareholders will see this transaction, as more favourable to both parties.”
Lebashe will continue to support EOH to unlock embedded value assets within the group, drive organic growth and strengthen the balance sheet.
Mahloele added that Lebashe is especially excited about the announcement of the corporate restructure of EOH that created an EOH corporate structure headed by newly appointed CEO Stephen van Coller. The corporate office will be responsible for corporate finance, strategy, group reporting, investor relations, risk and compliance, with the two newly created businesses, will create incremental opportunities to drive growth.
In the present South African economic transformation landscape, there are very real short-to-medium term opportunities for empowered listed companies such as EOH to unlock and uncover a wealth of investment and partnership opportunities. “We think the introduction of Stephen to the executive team is an inspired appointment, especially given the good foundation that has been laid by Zunaid Mayet and Asher Bohbot over the years.”
As Lebashe investigates businesses across Africa, “We see that virtually every sector of the African economy is experiencing growth in different pockets of the continent and presenting opportunities for established businesses and entrepreneurs alike. Firms like EOH and the technology infrastructure we can provide or inject into legacy infrastructure upgrades will be the driving force behind the creation of wealth across all areas of society.”
“The inefficiencies of African economies presently provide lucrative opportunities for first mover technology companies. To this end, EOH, being an integrated and yet broad-reaching technology firm with deep African roots, has a competitive advantage in terms of solutions origination and design for Africa’s unique challenges,” concludes Mahloele.