AEEI buys 57% stake in Puleng Technologies
JSE-LISTED financial services company African Equity Empowerment Investments (AEEI) yesterday announced that it had acquired a 57 percent stake in Midrand-based information technology (IT) company Puleng Technologies for an undisclosed amount.
AEEI, which was formerly known as Sekunjalo Investments, said it expected the investment into Puleng to have a pay-back period of between three to four years.
The company said the pay-back excluded the exponential capital appreciation it expected.
The purchase consideration was concluded partly in issuing shares in AEEI’s subsidiary and technology holding company.
“This adds to the sentiment that the Puleng shareholders believe in and are committed to this division’s growth and future plans which includes separate listing,” AEEI said in a statement.
Puleng Technologies is a broadbased black economic empowerment (BBBEE) level two company that offers clients risk mitigation through the use of data and user security.
Growing stable The company also facilitates collaborative governance, risk and compliance programme to address the IT risks businesses are faced with.
The acquisition is AEEI’s latest foray into the IT space and adds to its growing IT stable of Health System Technologies, Saratoga Software, Digital Matter, Emergent Energy, World Wide Creative, Afrozaar and a stake in multinational company, British Telecommunications.
AEEI’s chief executive, Khalid Abdulla, said the transaction would bolster the groups IT division and would provide value to clients.
“The deal is significant for AEEI with its estimated additional R200 million annual revenue to the group, which will complement and grow out technology division with additional technical skills across the group,” Abdulla said.
AEEI also has investments in security and defence specialist company, Saab Grintek, fund management group, Sygnia and consumer goods company, Pioneer Foods.
‘The deal is significant for AEEI with its estimated additional R200 million annual revenue to the group.’
Ian Cruickshanks, the chief economist at the South African Institute of Race Relations, said AEEI’s move was not surprising as IT was a growth sector that would derive profits in the foreseeable future.
“Those companies that have invested early in the sector are reaping the rewards now, and those who are investing now are positioning themselves to enjoy future return on investments,” Cruickshanks said.
AEEI was last month announced as the most empowered company on the JSE by empowerment and research company, Empowerdex after the amended BBBEE codes of good practice came into effect last year.
Paul Thompson, Puleng’s managing director, said the investment by AEEI would enable Puleng to leverage on AEEI’s reputation and position in the market to allow for further expansion.
“This partnership is critical to Puleng, which after 12 years of remarkable organic growth, is now focused on the next level of development,” Thompson said.
AEEI shares increased 1.52 percent to close R3.35. It will release its results today.