A black-controlled consortium called K2020893770 is buying Sybrin, a subsidiary of JSE-listed tech firm EOH, for R334 million. The business currently sits under EOH Mthombo.
The consortium comprises of One Thousand & One Voices Management (Mauritius) Ltd (“1K1V”) and Crossfin Technology Holdings (Pty) Ltd (CFTH) and their black economic empowerment partners led by Isaac Mophatlane. Mophatlane is co-founder of Business Connexion, rebranded by parent company Telkom into BCX, with his late brother Benjamin Mophatlane.
EOH said the base purchase price, after adjusting for net debt, non-operating assets and working capital, equates to an enterprise value (EV) of R410 million implying an EV/normalised EBITDA multiple of 5.3x on Sybrin’s 31 July 2020 normalised EBITDA of R78 million.
1K1V is a private equity fund backed exclusively by industry-leading families from around the globe while CFTH is an investment holding company that offers investors a blended exposure to technology investments in Fintech.
Established in 1991, Sybrin is a market leader in the provision of bespoke solutions to the banking, financial services and insurance sectors as well as central governments. Utilising its proprietary low-code platform, Sybrin specialises in developing, implementing and integrating end-to-end systems and solutions.
EOH CEO Stephen van Coller said EOH acquired Sybrin in 2013 as it was a great fit with the EOH strategy at the time, which included a stronger vertical focus and the opportunity for African expansion.
“We are excited for the new opportunities that this disposal brings for Sybrin. The sale of Sybrin is in line with EOH’s stated strategic goals of deleveraging the balance sheet as well as refining the business model,” he said.
“Over the past two years, EOH has been focused on establishing an appropriate capital structure.”
He added that this transaction allows Sybrin to unlock its full potential and brings EOH a step further towards building the “EOH of the Future” by reorganising the group and strengthening EOH’s capital structure. “
“Sybrin has benefitted from being part of the EOH journey and is now at a stage where it is well-positioned to leverage its proven track record and significantly scale its innovative technology across several geographies and as such is looking forward to starting the next growth chapter with its new partners,” Sybrin CEO Marius Maree said.
This transaction represents a significant milestone in EOH’s deleveraging plan and the proceeds of the transaction, net of costs, will primarily be applied to reduce debt with the remainder utilised for working capital requirements.
“We are confident that Sybrin will be enabled to further grow its digital assets under the new management and wish them the best for their future,” said van Coller.
