Investment manager Kholo Capital has provided R275 million in mezzanine debt funding to South African ICT distributor DCC Holdings to refinance existing debt and support its long-term growth strategy.
The funding, equivalent to about $17 million, was announced by Kholo Capital Mezzanine Debt Fund I.
DCC distributes technology products and solutions across Southern Africa, including personal computing, printing, enterprise infrastructure and software.
Its product portfolio includes offerings from global technology manufacturers HP, Dell and Lenovo, which it supplies to resellers, system integrators and retailers through its distribution network.
Founded in 1988, DCC has an established presence in the Southern African ICT distribution market. The business is backed by private equity investor Kleoss Capital.
Mokgome Mogoba, managing partner and founder of Kholo Capital, says the funding will help DCC optimise its capital structure, while providing financial flexibility for future growth.
“We are delighted to support DCC’s highly-experienced management team as the business enters its next phase of growth.
“This transaction demonstrates how structured mezzanine debt capital can be used to optimise a company’s capital structure, refinance existing debt and provide the financial flexibility required to support sustainable growth.
“DCC has established itself as one of South Africa’s leading ICT distributors, with a strong market position underpinned by longstanding relationships with leading global technology manufacturers, an extensive reseller network and well-established logistics and distribution capabilities.”
Zaheer Cassim, managing partner and founder of Kholo Capital, notes that DCC’s distribution network and logistics capabilities positioned it to pursue further opportunities in the regional ICT market.
“Over nearly four decades, DCC has built a formidable distribution platform, combining extensive market reach, strong logistics capabilities and a deep understanding of its channel partners’ needs.”
He adds that DCC’s investment in youth employment, support for learners with disabilities and SME reseller development reflects a commitment to inclusive growth.
“Its adoption of solar energy and water-saving measures further demonstrates a practical approach to responsible business. We believe DCC is well-positioned to capitalise on opportunities across the Southern African ICT market, and we are pleased to partner with management in advancing growth that delivers both commercial value and meaningful social impact,” Cassim says.
Hale Matsipa, managing partner of Kleoss Capital, points out that the transaction reflects momentum in South Africa’s private markets and continued collaboration between private equity and private debt investors.
“Kleoss Capital has valued the opportunity to work with Kholo Capital on this transaction, which positions DCC for its next phase of growth. It also reflects the positive momentum in South Africa’s private markets, and marks another successful collaboration between Kleoss Capital and a fellow private markets investor.”
Carlos Ferreira, CEO of DCC, says the company had expanded through the addition of key brands and growth within its existing supplier relationships.
“DCC’s shareholders, comprising senior management and Kleoss Capital, are pleased to introduce Kholo Capital into the capital structure of the DCC group.
“DCC has been growing steadily over the years with the addition of certain key brands and the expansion of our existing footprint within our established vendor relationships. Together with our capital partners, we look forward to the next chapter in the evolution of the business with continued optimism.”
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