Chance to reach critical mass
Purple Group announced a R100m deal with Sanlam Investment Holdings (SIH) that sees Sanlam taking a 30% stake in the controlling company for Easy Equities. There are a number of terms and conditions for the deal but it is good news for fans and clients of Easy Equities. It is growing but not fast enough, and could potentially run out of money. This deal gives it another three years to get to critical mass and become profitable. The time period is important as Sanlam has a put option whereby it can sell the stake back to Purple Group for the same R100m, essentially giving it an escape clause and defining the expected period by when Easy Equities needs to have comprehensively proved its business model.