Cornastone takes ACI stake

By Kimberly Guest for Cornastone

Johannesburg, 28 Jan 2008

Local black empowerment company Cornastone has acquired 25.01% of ACI SA, the local operation of Nasdaq-listed provider of electronic payments software, ACI Worldwide.

In a statement this morning, the companies said the BEE transaction had been concluded through a special purpose vehicle (SPV) "ACI Worldwide Cornastone", to which ACI has sold its South African subsidiary. Cornastone acquires 25.01% of the SPV, with ACI retaining the balance.

The value of the transaction, which is believed to be a cash deal, has not been disclosed. However, ACI said the amount would be settled over a period of time through a structured payment schedule.

Additionally, Cornastone has been appointed as a distributor of ACI products in SA and may engage in business development in sub-Saharan Africa.

Local conditions

ACI SA MD Daryl Berg says the deal brings the company in line with "the realities of the South African market".

"It will help make us more competitive. However, this is not just another BEE transaction. We are fully committed to transformation and we needed a partner to help us develop our local business with banks and government, to enhance our services capacity, and reduce the cost of post-sales support in sub-Saharan Africa. Cornastone was that company," he explains.

The deal is expected to see the companies move closer together as a joint board is set up. Additionally, they aim for cross-business career mobility, mentoring programmes and service offerings.

Says Berg: "We will be making use of Cornastone staff to provide technology development skills and support across our Europe, Middle East and Africa regions. In addition, Cornastone will assist us with progress towards compliance with the other pillars of the BEE codes."

Meanwhile, Cornastone Consulting CEO Hamilton Ratshefola says the deal is the company's biggest investment to date.

"It opens up huge opportunities for us and brings us closer to fulfilment of our overall strategy. It strengthens our banking application portfolio, and makes Cornastone ACI's de facto delivery arm in Africa. As an initial requirement, we will employ and train up six new engineers immediately," he reveals.

ACI says it may "in time" also use Cornastone for development skills through DVT, the JSE-listed company in which Cornastone has a 25% stake.