DataPro ups BEE stake

By Nicola Mawson for DataPro

Johannesburg, 16 Jan 2007

DataPro will sell a 20% stake to a black economic empowerment (BEE) consortium as it moves into high gear in financing its acquisition of Orion Telecom.

Lereko Metier Capital Growth Fund, a joint venture between the Lereko and Metier groups, will purchase about 20% of the DataPro group's share capital for over R120 million.

The private equity fund is managed by a black-owned entity, which lists its principals as Popo Molefe, Paul Botha, Valli Moosa, Thierry Dalais, Lulu Gwagwa and Anthony Hewat.

DataPro executive chairman Tony van Marken says the company could have waited until the conclusion of the Orion deal; however, it made sense to conclude the BEE deal now.

Orion, which has several provincial government clients, is being bought for R380 million through a combination of debt and equity funding. The entrance of an empowered private equity firm also aids DataPro in raising some funding for the deal.

"This transaction is in line with our strategy to make sure we meet BEE requirements in the public sector so that we can maintain and grow our base of business. In addition, a key prerequisite for procurement in the corporate sector is to deal with companies that are BEE compliant and this forms a large part of Orion Telecom's customer base."

Not the last

Van Marken says this is unlikely to be the last empowerment deal the company does, as it will move ahead with its acquisitive strategy, requiring more financing to be raised in the future.

The company still has to wrap up funding for the Orion deal and attain shareholder approval, for which a special general meeting will be held next month.

Van Marken says the company will have a BEE shareholding of just over 25.1% after completion of the deal, as black-owned fund Vantage Capital already has funds invested in the firm.

However, the exact percentage of DataPro's BEE status can only be determined once the final share price has been decided, as this will indicate how many shares need to be issued.

Lereko will fund the deal itself, says Van Marken. The empowerment firm is paying a 1.43% premium to the 30-day weighted average share price, at 85c. DataPro's shares closed at R1.05c yesterday, unchanged from the previous day's close.

On behalf of the empowerment consortium, Dalais says this is the "next logical step". "Together we have worked on several projects and been committed to an exciting strategy."

The deal is subject to the fulfilment of certain conditions.