Mergers, Acquisitions and Financial Results

Black investors including the high-profile Lazarus Zim and Tokyo Sexwale have taken a stake in technology supplier Sahara Holdings, buying its shares at a 33% discount.

The R173m deal sees Sahara sell 27% of its shares to a consortium formed by Sexwale's mining group, Mvelaphanda Holdings, and Zim's Afripalm Consortium. Mvelaphanda and Afripalm are each taking 12,1% of Sahara, and 2,8% goes to the Sahara Employees Trust Fund. The two investment groups jointly paid R15m in cash, along with an R85m loan from Nedbank. Sahara MD Atul Gupta is temporarily funding the rest via vendor financing. The shares all come from the founding Gupta family.

Sahara was valued at R960m, but the deal was based on a discounted price of R640m. That showed Sahara's commitment to transformation by letting black investors afford more equity, rather than just complying with the bare minimum demanded by empowerment law, Zim said.

Zim was CEO of Anglo American SA until he resigned in April. He still serves on Anglo's board and is chairman of Kumba and president of the Chamber of Mines. "I will be very involved in expanding Sahara's business," he said. "As I travel across Africa looking for mining opportunities I'll also be looking for opportunities for Sahara. We believe we can apply our resources to help Sahara grow its market share. We can also apply our knowledge and experience outside SA in the rest of the continent."

Despite the high profile of the new investors, Gupta said the deal would give Sahara a credible empowerment profile because Sexwale and Zim were heading broad-based entities. Within the Afripalm group were 35000 shareholders who had each invested a minimum of R2000.

Mvelaphanda's business strategy executive, Vusi Mavimbela, said it made sense to invest in a hi-tech player so they could help each other. Mvelaphanda aimed to grow in Africa and internationally with its oil exploration, mining and security operations. Information technology was an essential part of that, Mavimbela said.

Business Day