CommsCo, the IT subsidiary of technology, media and telecommunications investment group VenFin, has consummated a black empowerment deal with Circle Capital in a 50/50 venture.
The deal was officially announced in Cape Town yesterday, although the transaction was effective from 31 May. No value was given for the transaction.
Hlumelo Biko, the son of activist Steve Biko who died in police custody during the 1970s, founded Circle Capital. Among the other members of the investment firm are former UCT vice-chancellor and now MD of the World Bank Mamphela Ramphele, former COO of the State IT Agency Ken Modise, and corporate attorney Blessing Rugara.
Biko is now chairman of the CommsCo board.
CommsCo will have Circle Capital as its major shareholder with 50% of the equity. VenFin will own 38% and industrial investment group Remgro will control the remainder. VenFin and Remgro, along with luxury goods group Rembrandt, are part of the Rupert family of investment companies.
Among VenFin`s interests are a 15% stake in cellphone operator Vodacom and a $100 million bond in IT group Dimension Data.
CommsCo was founded in 2000 to supply IT services and consulting to companies in the VenFin, Remgro and Rembrandt groups in SA and abroad. It still supplies hardware for the Rembrandt group through its Geneva offices, but its overall strategy has changed.
"Our strategy has changed partially because we found the IT philosophies differed markedly between the different groups," says CommsCo CEO Hans de Nysshen. "For Instance, Rembrandt companies do things very differently from the way Remgro and VenFin companies do."
De Nysshen says the change in IT focus by companies in general has also influenced CommsCo`s strategy. "The end-users have become a lot smarter in how they use IT and leveraging their investment from it and now the emphasis is on how IT will benefit the business process."
Biko says Circle Capital will help CommsCo transform into a truly black empowered company by bringing black top and middle managers into the firm while helping it diversify its skills base.
"Our [Circle Capital`s] approach is truly one of partnership. We foresee being able to leverage significant growth for CommsCo in public and private sectors and in the development of public private partnerships," he says.
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