Sebata sells another subsidiary to Inzalo in latest B-BBEE deal
Technology group Sebata on Tuesday announced the sale of a majority stake in its Software Group Companies subsidiary for R501.9m to Inzalo Capital Holdings in a bid to improve its empowerment credentials.
Sebata, which specialises in servicing the public sector, sold a 55% stake in its Software Group Companies, which is made up of Sebata Municipal Solutions, R-Data and MICROmega Accounting and Professional Services (MAPS), which are all wholly owned subsidiaries of the company. A further 5% stake will be donated to Inzalo by Sebata.
Sebata Municipal Solutions provides enterprise management systems and professional services for municipalities and provincial governments, R-Data provides public sector accounting system solutions, and MAPS is an accredited training office focusing on educating accounting students.
Inzalo has until the end of March 2022 to settle the full purchase amount with Sebata, subject to a condition whereby the Software Group Companies has to achieve earnings before interest, taxes, depreciation and amortisation (ebitda) of R35m for the 12 months to end-January 2021 and ebitda of R45m for the following year.
Any dividends received by Inzalo during that period will go towards paying the purchase consideration until the deal is fully paid up.
The company said the deal will boost Sebata’s Broad-Based BEE (B-BBEE) ratings and create shareholder value.
“The Software Group Companies are presently experiencing significant difficulty in attracting new customers and retaining existing customers as a result of their unacceptable empowerment status,” Sebata said.
The majority of the net proceeds of the transaction will be distributed to Sebata’s shareholders, the company said.
The audited value of the net assets of the Software Group Companies as of March 2019 is R274.3m, said Sebata, with profit after tax for the companies at R58.9m for the period to March 2019.
This is not the first time Inzalo has taken up a majority stake in Sebata’s assets. In August 2019, Sebata announced the sale of a majority stake in its subsidiary the Water Group, for R388.4m to Inzalo in a bid to, yet again, improve its empowerment credentials.
This brings the total transaction value between Sebata and Inzalo to more than R890m.
Shares in Sebata remained unchanged on Tuesday and for the week at R2.30, giving the company a value of R264.30m.