The founders of Mthombo IT Services (M-IT) say they have been itching to be counted among the biggest ICT players on the local market, and the company`s merger with Enterprise Outsourcing Holdings (EOH) could see them realising their dream.
The company announced yesterday that it had been merged into EOH`s existing operations.
EOH is a listed entity on the JSE`s software and computer services sector and M-IT is an empowered IT service provider.
[VIDEO]"The merger has also resulted in the formation of the Mthombo Trust, which will provide equity participation for previously disadvantaged members of EOH and M-IT.
The deal will also see the introduction of black shareholders, senior management and staff to what the companies believe will be one of the largest local IT services organisations.
The merged business will have over 900 staff members, of which 38% will be black employees. M-IT founders Nkosinathi and Lucky Khumalo will be appointed to the EOH board of directors.
[VIDEO]M-IT CEO Nkosinathi Khumalo says this would result in the EOH board comprising four black directors, including three non-executive directors and Nakedi Mathews Phosa as non-executive chairman.
"This will ensure our hands-on commitment to EOH to enable us to build a great business," comments Lucky Khumalo, COO of M-IT.
Both the M-IT heads says the merger could not have come at a better time because their business is complementary to EOH`s focus and the companies share the same entrepreneurial spirit.
M-IT has been investigating the possibility of listing on the JSE Securities Exchange`s AltX for some time and this merger will allow the company to "play in the big boys` club".
The transaction was valued at R40 million, of which only R6 million was paid in cash and the rest in shares, nine million of which will be in the hands of employees.
Asher Bohbot, EOH chief executive, says the share option for previously disadvantaged individuals (PDIs) at the company is not only targeted at current employees but will be also used as a way of attracting other PDI professionals.
As both companies are well-known brands on the local market, Bohbot says there will not be a name change in the short-term and the integration process will take less than a year.
Another good thing about this deal is that it`s not a matter of a good company bailing out a company that is not performing well; it`s actually two strong companies forming one even stronger entity," he adds.
Khumalo says one of the biggest positives for the merger is the fact that there will be no staff rationalisations and the new entity will actually take on more staff.
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