EOH offloads Sybrin in R410m deal with 1K1V consortium
EOH has announced the disposal of its subsidiary, Sybrin, in a R410 million deal with a consortium led by One Thousand & One Voices Management (1K1V) and has Crossfin Technology as an empowerment partner.
With the deal, Sybrin − which predominantly provides bespoke solutions to the banking, financial services and insurance sectors − will be carved-out from the JSE-listed EOH, as the company seeks to reorganise and strengthen its capital structure.
Announcing the transaction, EOH CEO Stephen van Coller says the deal is in line with the group’s long-term strategy.
This development comes as Van Coller and his team are steadily making progress in key EOH strategic initiatives, including optimising the cost and capital structure, while focusing on quality of earnings.
“The sale of Sybrin is in line with EOH’s stated strategic goals of deleveraging the balance sheet as well as refining the business model. Over the past two years, EOH has been focused on establishing an appropriate capital structure. This transaction allows Sybrin to unlock its full potential and brings EOH a step further towards building the ‘EOH of the future’ by reorganising the group and strengthening EOH’s capital structure,” says Van Coller.
For Van Coller, this transaction represents a significant milestone in EOH’s deleveraging plan and the proceeds of the transaction, net of costs, will primarily be applied to reduce debt, with the remainder utilised for working capital requirements.
“We are confident Sybrin will be enabled to further grow its digital assets under the new management and wish them the best for their future.”
Van Coller says EOH acquired Sybrin in 2013, as it was a great fit with the EOH strategy at the time, which included a stronger vertical focus and the opportunity for African expansion, but now the company is heading in a new direction. “We are excited for the new opportunities that this disposal brings for Sybrin.”
Sybrin integrates software solutions into the core banking systems of middle-market and large banks, with current clients including Citibank, Nedbank and Old Mutual. Sybrin has a footprint across 17 countries in Africa, the Middle East, the United Kingdom and Eastern Europe.
Commenting on the sale, Sybrin CEO Marius Mare says: “Sybrin has benefitted from being part of the EOH journey and is now at a stage where it is well-positioned to leverage its proven track record and significantly scale its innovative technology across several geographies, and as such, is looking forward to starting the next growth chapter with its new partners.”
For the new shareholders of Sybrin, the deal presents an opportunity for them to explore new frontiers.
1K1V, a private equity fund, together with diversified fintech firm Crossfin Technology, which has Isaac Mophatlane as an investor, has growth ambitions stretching from Africa to the US.
“1K1V acts as a bridge between Africa and the United States, bringing talent, expertise and technology from Africa to the United States and vice versa. We intend to help Sybrin expand its footprint internationally and unlock synergies with our existing technology investments,” says Hendrik Jordaan, president and CEO of 1K1V.
“Crossfin’s strong track record of investing in high-growth, cash-generative businesses made it a natural partner for this investment. The same goes for Isaac, a non-executive board member and investor in Crossfin, who has a deep understanding of African technology investments.”
Crossfin CEO and co-founder Dean Sparrow adds: “Sybrin has become a leading enterprise software solutions provider and its focus on fintech and regtech, underpinned by rapid enterprise application development and delivery, makes it extremely complementary with other companies in the Crossfin portfolio.
“We are confident in the growth opportunity of a technology-led financial services sector globally and see considerable cross-selling opportunities within Sybrin’s customer base and across the diverse African countries in which it already has an existing presence.”