Broad-based black economic empowerment investment firm Mineworkers Investment Company (MIC) has concluded a 25.1% acquisition deal in telecommunications, retail and technology services company DN Invest (DNI).
The black economic empowerment (BEE) investment deal is valued at approximately R760 million.
DNI is a distributor of mobile phones, prepaid airtime, mobile subscriber starter packs and SIM cards to emerging consumers in SA.
Its clients and suppliers include mobile network operators Telkom, Cell C, MTN and Vodacom, and local retailers.
The company also owns an interest in a range of digital technology platforms, which include micro-jobbing, training, airtime advance, SMS aggregation and service delivery platforms in the mobile space.
Established by the Mineworkers Investment Trust in 1995, MIC invests in companies of all sizes and across various sectors. It has in the past invested in vehicle tracking company Tracker, wireless communication technologies firm Optron and Vodacom, among others.
The deal will help MIC solidify its position in the local telecoms sector, having made numerous technology-related investments over its 25-year history, according to the companies.
“We ran a process to raise equity for the group and in that regard, tapped into our existing shareholder network,” says Andrew Dunn, CEO of DNI.
“We realised that MIC would be the ideal partner for our business given their excellent track record as value-adding shareholders. We therefore could not be more excited to have successfully closed the sale of the available stake to MIC, in addition to the wealth of experience they bring as active shareholders. This is hugely positive for DNI going forward given our growth objectives and commitment to transformation within South Africa.”
While most sectors have suffered due to the depressed macro-economic environment, compounded by the COVID-19-induced lockdowns, the telecommunications sector continues to grow, and arguably will accelerate with the structural shifts to digitisation, adds Dunn.
DNI says it has performed robustly in the challenging economic climate and is well-positioned for growth through and beyond the COVID-19 pandemic.
“MIC’s acquisition of DNI demonstrates our confidence in the company, its seasoned management team and the prospects of the telecommunications sector,” says Mary Bomela, MIC CEO.
“Even prior to the blow that COVID-19 has dealt to the economy, trading conditions were difficult for several years in SA, and finding assets that have continued to grow and generate dividends in this environment is tough. DNI offers MIC both growth and dividend flow – key to sustaining MIC’s dividends to its shareholder trust that fund a range of educational and developmental programmes.”
The transaction is one of MIC’s largest investments to date, according to the company.
DNI says it is committed to improving its BEE level and standing, and has embarked on a broader transformation journey, and MIC will be an important partner in guiding it, given its long history and experience in the BEE investing space.