Dialogue signs R113m BEE deal

By Damaria Senne, ITWeb senior journalist

Johannesburg, 05 Oct 2007

Outsourced call centre provider Dialogue Group has entered into a R113 million deal with black economic empowerment (BEE) partner MSG Consortium. This will see the latter acquire a 25.1% shareholding in the company.

As a result, Dialogue's total BEE ownership will exceed 30%, as MSG Consortium constituents MSG Afrika and Tlhalefang Investments previously purchased 7% and 1% shareholding in the group, respectively.

In this deal, MSG Consortium acquires an additional 70 373 832 shares, at R1.61 per share, payable in cash following regulatory and shareholder approval.

The share price represents a 7.5% discount to the average trading price for the 30 days before the agreement was signed. The agreement is dated 2 October.

"In recognition of the level of discount granted to the consortium and the potential funding guarantee... a lock-in and restraint period of a maximum of three years will apply to the shares acquired by the consortium," the group says.

The Industrial Development Corporation will fund the deal. Dialogue says it will use the funds to finance recent acquisitions of Continuity SA for a maximum of R41 million and Callforce Direct for up to R18.5 million.

Dialogue says it is in the process of appointing an independent professional expert to evaluate whether the terms of the transaction are fair.

In August, Dialogue acquired a 51% shareholding in business continuity and disaster recovery firm Continuity SA.

The company recently released interim results, which saw earnings up by 114%, to R5.9 million, off 87% higher revenue of R83.1 million. Headline earnings per share grew 77%, to 2.8c.