The Story of an African firm ...
* 25% black owned entity
* Merged entity with well over 900 employees, 38% previously disadvantaged
* Broad based empowerment through the creation of the Mthombo Trust
* Four black directors, three executive and non-executive chairman
EOH, one of South Africa`s largest consulting, technology and outsourcing companies listed on the software and computer services sector of the JSE has merged Mthombo IT Services (M-IT) into its existing operations. The Group has also announced the formation of the Mthombo Trust, which will provide broad based equity participation to previously disadvantaged staff members of EOH and M-IT.
M-IT is a leading black IT service provider focused on delivering specialist, cost effective, IT infrastructure services to the corporate and public sectors. M-IT is a well established multi-vendor accredited service provider with a team of highly qualified professionals, good long-term relationships with its customers and a national footprint.
"The transaction with M-IT is an excellent example of true business transformation. It provides added value to both parties in the form of new market opportunities, operational management, skills development and black empowerment. It is about meaningful participation and imparting of knowledge and skills across all our employees," says Asher Bohbot, Chief Executive Officer, EOH.
"As the Financial Mail Top IT Stock for 2004, and with its impressive growth, EOH drew our attention to a very exciting opportunity. M-IT`s strategic focus for 2005 was to develop its consulting and outsourcing businesses. We also wanted to be part of a listed company that has similar values, culture, entrepreneurial spirit. The two business are complementary with minimal overlap, this enables us to fuel our own entrepreneurial spirit and continue to grow," says Nkosinathi Khumalo, Chief Executive Officer, M-IT.
The merger will result in the introduction of black shareholders, senior management and staff to what will be one of the largest IT services organisations in South Africa. The total staff complement of the merged business will be in excess of 900, of which 38% will be black employees. Nkosinathi Khumalo and Lucky Khumalo will be appointed to the Board of Directors of EOH. This will result in the EOH Board comprising four black directors including three executive directors and Dr 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, Chief Operating Officer, M-IT.
EOH believes that the most effective way to achieve broad based empowerment is to involve its PDI employees in the ownership of the business. To this end the Mthombo Trust has been created for the benefit of current and future, previously disadvantaged employees of both EOH and M-IT. This will allow EOH to attract and retain top black business and IT professionals. "The merger with EOH thus provides a natural growth path for us and our valued employees," says Lucky Khumalo.
Voted the top black ICT company for 2004 by Forge Ahead and Department of Communications, M-IT brings with it additional service offerings, previously unexplored by EOH, and impressive expertise within the public sector. EOH is now able to offer M-IT`s portfolio of services which includes managed services, multi-vendor warranty support and the provision of on-site resources.
"This deal not only provides EOH with new avenues for business but will also play a vital role to ensure that we continue to make our contribution to a changing South Africa. We are passionate and extremely proud of this transformation merger because it makes business sense and not just charter sense. It will undoubtedly impact the new EOH in many positive ways, one of which is enabling us to fulfil our long standing dream of becoming the number one business and technology solutions provider in Africa," concludes Bohbot.
Share