Itec signs massive community-based BEE deal
Office automation giant Itec Holdings has concluded a broad-based black economic empowerment deal with Ikamva Labantu Empowerment Trust, a broad-based investment vehicle for a non-governmental, non-profit organisation that works with community-based organisations serving children, youths, the elderly and the disabled.
In terms of the deal, Ikamva Labantu holds a 50.1% share of Itec, enabling it to benefit from the multimillion-rand company's dividends in perpetuity.
"This is the culmination of a three-year search on our part for the ideal BEE partner," says Itec CEO Jacques Duyver. "Itec met many potential partners during this time, but we did not want a partnership that would enrich one or two individuals; we wanted a broad-based agreement that would impact the lives of thousands of underprivileged people. Ikamva Labantu has given us that opportunity.
"Our two organisations agree on what BEE should be all about. At the same time, the transaction also enables both Itec and its dealers to meet corporate social investment requirements."
Ikamva Labantu facilitates positive social change by building the capacity of community-based organisations. It enables them to become self-reliant and self-sufficient so that they can deliver Ikamva Labantu's four core services: primary healthcare, education and skills development, food security and enterprise development, and land and buildings. Over 65% of those who benefit from its programmes are black females.
"We work with the most vulnerable members of the community until they no longer need us," says Sipho Puwani, managing director of Ikamva Labantu Empowerment Trust. Puwani, who has been with the organisation for over a decade, says the need for its services became acutely apparent with the demise of apartheid and the withdrawal of donor funding from the non-profit sector. "It is vital for organisations to move beyond the provision of welfare and to focus rather on empowering people so that they can work and create income for themselves," he stresses.
Puwani says the deal creates a new revenue stream for the Ikamva Labantu that will enable it to plan well up to five years into the future, so that it relies less on donor funding which typically covers 12 months at a time.
It is the organisation's focus on empowerment that attracted Itec. "We believe that enabling people to empower themselves through knowledge and experience is the best foundation for widespread and sustainable growth in this country," Duyver notes. "In this respect, Ikamva Labantu and Itec share the same goals. Developing people's skills enables them to generate wealth and creates employment opportunities that are sorely needed. Ultimately, we want the people whose lives are touched by Ikamva Labantu to become our customers in future."
Itec performed a due diligence on the organisation, ascertaining that it is structured in a way that ensures funding reaches the people who need it. "The Ikamva Labantu Trust is governed by a board and is the keeper of all the funds that come into the organisation. The trust dispenses cash to Ikamva Labantu as it is required," says Puwani.
Duyver says the deal is unusual as it means that Itec Holdings not only complies with the requirements of BEE in terms of ownership and management, but also meets other scorecard requirements such as socio-economic development and skills development.
"As the fastest growing office automation company in the country, Itec will add great value to the work Ikamva Labantu is doing," says Duyver. "The more rapidly our dealerships grow, the greater the dividends for the organisation. For Itec, the deal confirms that we are a credible company with all the right credentials, an important factor for us as we turn our focus on the corporate and government sectors and demonstrate our expertise at these levels."
Puwani says that one of the first projects his organisation is going to tackle following the Itec deal is a national programme on agriculture, aimed at teaching people about the need to grow food not only for subsistence, but more importantly for commercialisation and export.