Local ICT business tycoon Andile Ngcaba said yesterday that investment firm Convergence Partners (of which he is chairman and 88% shareholder) has completed a capital raising to the tune of R200 million.
Ngcaba, who is also chairman of Dimension Data SA, was director-general of the Department of Communications for over eight years, until December 2003.
At a press conference in Illovo, Johannesburg, Ngcaba told the media that Nedbank Capital has contributed R125 million, and Makalani Holdings a further R75 million.
This money will be used for further investments and ventures - spanning the domains of technology, media and telecoms.
"We will focus less on mature businesses, [and] more on companies that are expected to see faster growth."
Right mix of skills
"We will invest in companies where we believe we can add value through our own expertise and sector-specific knowledge, and where we can contribute to their long-term growth," added the former Communications Department director-general.
He believes his team is very experienced in the industry and in advisory and research roles. Many of the members also have experience in regulation, financing and deal-making.
Ngcaba has been involved in ICT in SA for 30 years.
In-house researchers, in conjunction with telecoms think-tank BalancingAct, have begun producing research reports which will help to inform many of the investment decisions.
Opportunistic investments
The Johannesburg-based, black-empowered Convergence Partners is now into its second year of operations, and is run on a day-to-day basis by CEO Brandon Doyle, previously head of investment banking at Nedbank Capital.
He points out that investments will be opportunistic. "We don't want to wait for large BEE deals to come along, and then put ourselves in for a beauty parade."
Convergence Partners has a 9.5% interest in DiData SA, owns over 1% of Telkom, and has interests in Britehouse, Gemalto and Inala.
Added to this, it will soon own 32% of WiMax infrastructure specialists ComSol, and has a miniscule, but noteworthy stake in Nedbank.
The gross value of these interests is about R7.5 billion, with the equity value to Convergence Partners falling in at about R420 million - once one strips away debt and financing structures.
No conflict
Despite media being one of the investment focus areas, Doyle and Ngcaba can categorically rule out the chance of Convergence Partners being involved with any of the 16 potential pay-TV licensees.
Such a move would conflict with the Telkom stake, bearing in mind that one of the TV licence applicants, Telkom Media, is 66%-owned by Telkom.
On the likelihood of Convergence Partners being involved in the imminent multibillion-rand Vodacom empowerment deal, Doyle uses the word "unlikely".
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