How BSG founder selected Mteto Nyati for controlling stake

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 07 Feb 2023
BSG founder Greg Reis and executive chairman Mteto Nyati.
BSG founder Greg Reis and executive chairman Mteto Nyati.

Greg Reis, founder of local technology and consulting services firm BSG, spurned overtures from local and international firms for a 40% stake in the company, before handpicking former MTN SA and Altron CEO Mteto Nyati for the gig.

During an interview with ITWeb, Reis revealed the details of how Nyati, who also had a stint as Microsoft SA MD, got to snap up the 40% stake.

In November, the home-grown BSG announced Nyati had acquired the controlling interest in the Houghton-headquartered company for an undisclosed amount.

Prior, the 40% shareholding was held by Hosken Consolidated Investments (HCI), a black empowerment investment holding firm listed on the Johannesburg Stock Exchange (JSE).

According to Reis, Nyati has already made a difference in the company, thanks to his people skills and status as a well-known ICT industry heavyweight in SA, among other factors.

Nyati − who sits on the boards of Eskom, Nedbank, Telkom and Massmart − bought into BSG through investment vehicle Wazo Investments. He has since been named executive chairman of BSG, which also has offices in Cape Town.

Reis believes Nyati will be able to use his experience to take the company to the next level, with plans to go global.

The 26-year-old BSG plays in a turf entrenched by multinational consultancy firms, such as Deloitte, Accenture and KPMG.

It was time

“I think, like everything else in life, you have to move on to other relationships. So Mteto come to pick up the 40% HCI stake,” Reis tells ITWeb.

“I realise BSG still has a lot of potential and there is still a lot to do. I’ve been an entrepreneur for most of my life and I am not really the right person to take BSG to where it could and should be as a home-grown technology and consultancy company.”

Reis jumped at the opportunity to approach Nyati as soon as the news broke that he had tendered his resignation from JSE-listed technology services firm Altron in January last year.

“It just hit me that somebody like Mteto could be the ideal person to come and help, and work alongside myself to strategically realise BSG’s full potential. What’s exciting about that is he is not just somebody coming to become a shareholder, but someone coming in to get involved and really work.

“Mteto has different attributes and skills compared to what I have. So, it was really about making sure we find a shareholder that would come and work hard and take BSG to where it can go.”

According to Reis, there have been suitors for the BSG stake over the years, mostly the global consultancies, as well as large local firms, “some of which had witnessed some challenges over the years”.

“But we didn’t ever want to do that because we have a unique brand. The culture and special nature of the business is why Mteto was selected to be involved. We would have lost all of that had we gone that way.

“The other interesting thing about the 40% stake is that HCI and myself both agreed that it was time to move on. So, it was about buying the equity, and it was really about us seeking the right partner in Mteto.”

As to whether there have been significant changes to the business since Nyati joined, Reis says: “Absolutely! Mteto and I have been talking since last year, as these transactions take a lot of time to conclude. But formally, we announced [the deal] to the people at the business below the line in September.

“We have a mindful growth strategy from a people point of view. We are talking to a lot of people about becoming part of our journey, and Mteto’s ability to talk to people to become part of our journey is quite exciting.

“Just the fact that people have seen Mteto believes in us and has seen what we are doing – that makes a big difference in regards to clients.”

Reis adds: “We are not a company that is in trouble. Mteto has worked in many different companies that had issues and he had to turn them around; for example, at Altron, etc. But here, he said BSG is very healthy and there are no issues.”

Origin story

Reis explains he left SA in the early 1990s to travel and see the world. “I was also struggling with the political situation in SA at the time, and I was really lucky to see how the IT business was developing outside of SA.

“As an entrepreneur, I started a company in Europe, but I always wanted to come back to SA. Late in the 1990s, I came back and brought the experience that I had.”

He realised there was an opportunity to start a services business, which could compete with the global consulting companies.

“We set ourselves as a challenger brand because there weren’t any examples that I was able to find where companies were completely agnostic of technology, or didn’t supply a product.”

Reis started by recruiting an Information Science (IS) graduate from the University of Cape Town (UCT). It was all hard work, luck and timing, he states.

“I was amazed by how this particular individual could think about business issues and the solution at one go. In a way, we just became translators between the business silos and IT.

“I went to the Department of Information Systems at UCT and we started employing the best IS graduates. We built our company off the back of the IS graduate programme. We expanded into Rhodes [University] and, ultimately, to University of Pretoria, [University of] Johannesburg, and so forth.

“Over the past 26 years, we have built a graduate recruitment and development programme. We don’t, obviously, only recruit from the graduates, but that’s how we built the company, focusing exclusively on IS and Computer Sciences.”