Three years after it bought a 49% stake in black-owned project management consultancy Uyandiswa and built the firm up to an almost R100-million a year company, JSE-listed IT firm Adapt IT has sold its stake back to the black-owned startup — at a whopping 90% discount.
The sale was announced yesterday in a press release from Adapt IT, which said the deal was effective from 1 July 2017.
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Adapt IT said the buyback concluded a “successful enterprise development programme” during which Adapt IT took Uyandiswa, then a two-person business in 2014, and helped build it into an “80 person-strong firm with a turnover nearing R100-million”.
Apart IT marketing manager Lucian Naidoo yesterday revealed that the IT company will sell its stake back to Uyandiswa at a 90% discount.
However, he was not prepared to disclose the value of a separate transaction concluded with Uyandiswa, where the black-owned startup also acquired Adapt IT’s business intelligence resourcing division, including the 42 staff that previously were employed in the division by the JSE-listed firm.
Apart IT was not prepared to disclose the value of a separate transaction concluded with Uyandiswa, where the startup also acquired Adapt IT’s business intelligence resourcing division
Naidoo was only prepared to say that that transaction is “100% vendor-financed” (ie the deal is being financed by money lent to Uyandiswa from Adapt IT).
Ventureburn asked Naidoo what the arrangement exactly is in having Adapt IT’s business intelligence resourcing division fall under Uyandiswa.
“This consulting division has a significant common customer base, a synergistic service offering and similar management approach to the Project Management line of business of Uyandiswa,” he said.
In addition, during the three years it invested in Uyandiswa, the listed company ploughed about R4-million in enterprise development spend in free business support and cash grants count and over R5-million in revenue into the black-owned firm. The amounts excluded the transaction discounts the black-owned firm received on aquisition of the 49% from Adapt IT.
When contacted by Ventureburn, Uyandiswa founder Amanda Dambuza (pictured above) — a former chief information officer at Barclays Africa — hung up when asked to comment on the 90% discount and whether it is in keeping with the spirit of BEE. Her only comment was that “I am not a specialist in BEE”.
However, in the earlier press release Dambuza that her company’s case “represents one of the few cases of enterprise development done right in South Africa”.
Despite this Uyandiswa had set up its own enterprise and supplier development programmes as an important part of its ecosystem and had also established the Uyandiswa Graduate Programme.
Featured image: Uyandiswa founder Amanda Dambuza (Supplied)
UPDATE: Uyandiswa founder Amanda Dambuza has subsequently responded to Ventureburn’s questions, read her response here.