Mergers, Acquisitions and Financial Results

Two more black empowerment deals have been announced in the information technology (IT) sector. TuringSMI has signed a deal that puts 49% of its South African subsidiary into local hands.

Black-owned Cornastone Enterprise Systems will acquire 26%, and 23% has been bought by TuringSMI's local managers. The US-based company is a global supplier of BMC Software.

Cornastone founder and chairman Lufuno Nevhutalu will take a nonexecutive position on the board of TuringSMI Africa. Nevhutalu has not said how much Cornastone is paying for the 26% stake, but described the amount as "substantial".

"This deal will strengthen TuringSMI's market presence and its ability to tender for both private and public sector business," Nevhutalu said. "It is the fastest-growing BMC Software partner in SA and our aim is to be one of the major players in the IT software services market within the next 18 months."

The Johannesburg sales offices of Cornastone and TuringSMI will merge. TuringSMI CEO Dominic Anschutz said the aim of the empowerment deal had been to find a partner to play an active role in its African operations and not just be a passive shareholder.

As part of its commitment to SA, the company has invested R10m to base two new global divisions in its offices in Cape Town. A managed services division will remotely monitor and maintain the BMC software used by its global clients, and a second new division will provide technical support to those clients. Both divisions are manned by specialist BMC software engineers and operate around the clock.

"We view SA as the launching pad that enables us to provide BMC Software support and services to the rest of the continent and worldwide," said Anschutz.

"The decision to invest heavily in SA was an easy one because of its highly skilled talent pool and the strong level of computer science training that graduates get."

In a separate deal, Johannesburg-based NSS is selling 25% of its shares to two investors, Lerato Mashologu and Nonkqubela Mazwai. The terms of the deal have not been disclosed. Mazwai, who has worked in the IT industry and in consulting, will take an executive position.

NSS CEO Lynda Odendaal said finding the right partners had taken almost 18 months. The deal should open the door for new empowerment entrants and black women at NSS, she said.

Business Day