EOH offloads huge CCS stake to pay off debt
JSE-listed ICT services company EOH has sold 70% of its Construction Computer Software (CCS) business to RIB Software for R444m as part of a strategic partnership agreement with the German buyer.
In a statement on Tuesday morning, the company said: “The transaction is in line with EOH’s investment strategy to assist its intellectual property and software-based businesses to expand internationally.”
The CCS group is a provider of software solutions for the construction and engineering industries. Its flagship products are Candy, a construction management software designed for estimation and control of projects, and BuildSmart, a fully integrated enterprise management system.
On Tuesday, EOH said it had also entered into a put-and-call-option agreement to sell the remaining 30% of CCS to RIB in December 2022.
EOH said a big chunk, 75% of the CCS sale proceeds will be used to reduce debt and the remainder of the proceeds will be used as working capital for EOH.
The latest transaction seems to fit well into EOH’s turnaround plans by CEO Stephen van Coller, who in April said group had identified assets it wanted to sell to strategic partners, worth around R1 billion.
This was expected to take place over three to 12 months.
In an interview with ITWeb in April, Van Coller said the IT services company needed a strategic refocus and had been through a process to create a definition of what it thinks its differentiated strategy will be going forward.
"We just put all the businesses through this filter, and they either filtered out yes or filtered out no. And the ones that filtered out no, we've packaged into verticals and we're doing processes in each of those verticals.
"A big chunk of them are actually profitable businesses. I'm just not the right owner. And I think it's irresponsible for me from a shareholder perspective and employee perspective, just to hold on to it because it's a profitable business. I can't make it a better business, and therefore, I shouldn't hold it," he explained.