The investment arm of trade union body Cosatu and finance house Brown Brother Holdings paid R20 million to buy MGX subsidiary Software Futures.
This is a far cry from the R100 million at which Software Futures was valued in 1998, when CCH bought a 60% stake for R60 million. CCH was subsequently acquired by MGX.
The purchasing consortium, comprising Brown Brother and Kopano ke Matla Investment company, has already injected R5 million cash into the operation to fund a transition period.
"The difficulties MGX as a group has experience have affected us negatively, as has the lack of black empowerment," says Software Futures chief operating officer Vaughan Diedrick.
"We have found it difficult because of these issues to sign new customers, which has put our future at risk. This transaction takes care of these two factors and has the benefit of providing operational cash for the business going forward until we have put this period behind us."
MGX executive consultant Mike Braby says the consortium intends to retain management as it is.
Kopano ke Matla CEO Collin Matjila says the consortium views the acquisition as a strategic investment. Kopano ke Matla will take a management interest in the operation while Software Futures management will retain an active shareholding.
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