Less than a week after announcing a R27 million loss for its financial year, the Connection Group says it will sell its Training Connection subsidiary to Torque 42, a Mustek subsidiary.
The deal will be settled with a R18 million cash payment. And the man behind the deal is Gary Chalmers, the same man who started the Training Connection three years ago and then left in January this year.
A previous deal with Datatec fell through in August, with the Connection Group citing an inability to iron out contractual difficulties.
Datatec originally offered the Connection Group R79.9 million for its training arm. But that was before the sale of Comtec, the UK-based training company, for about R70.7 million. Comtec was bought out by its management. This means the separate sales brought in about R8 million more than the single Datatec transaction would have.
The Connection Group says Training Connection has a net asset value of R5.2 million, and it attributes an R18.8 million loss to the company for the past financial year.
An excited Gary Chalmers says he will once again head the company. At his resignation he said that day-to-day corporate management was not his thing and styled himself as an "entrepreneurial, small-business type of guy."
Things will be different with a Mustek owned company, he now says. "I was not cut out for the Connection Group, a big corporate environment. But in Mustek I will be doing my own thing." He is also a shareholder once again, having previously sold his 50% stake on leaving Connection.
Connection Group CEO Pierre Joubert says discussions with Mustek began only after the Datatec deal had been called off. The process of discussion took a little under one and a half weeks, he says, and such a swift transaction is partly due to Chalmers` knowledge of the company.
Chalmers is quick to reciprocate, praising Joubert and Connection for smooth negotiations. "They lay all their cards on the table right at the start," Chalmers says. And although he admits some bitterness after taking his leave, "that is now all far behind us."
The Connection Group was not available for further comment.
Although it will probably be business as usual until the end of the year, Chalmers does not plan to keep the Training Connection brand for very long. "We would move away from that and create our own identity." He also says no staff will be lost through retrenchments, although a number of resignations are expected.
Senior Mustek management was not immediately available for comment at the time of going to print.
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