Diversified industrial manufacturer Eaton Corporation has clinched an interesting BBBEE deal with Shalamuka Capital in a transaction that is aimed at benefiting a maths and science focused educational development programme.
Eaton, an American corporation, announced yesterday the deal which will give Shalamuka an undisclosed stake in the industrial manufacturer’s SA opetrations. Shalamuka is BBBEE private equity investor established for the benefit of Shalamuka Foundations. The latter runs the renowned Penreach programme, Africa’s largest school-based outreach program that focuses on training for teachers and students in math and science in Mpumulanga.
While the terms of the partnership were not disclosed, the agreement between Eaton and Shalamuka includes a minority stake in Eaton’s South Africa electrical business that will generate income to be invested directly into the Penreach program on an annual basis.
“We are delighted to partner with Shalamuka and look forward to many years of working together to grow a strong business as well as provide support for a program aimed at improving education in South Africa,” said Frank Campbell, president of Eaton’s Electrical business in Europe, Middle East and Africa. “Eaton’s support for Penreach is part of a global strategy to help create and expand the pool of highly qualified employment candidates for our business.”
Eaton and Shalamuka have agreed that the partnership will provide economic support for Penreach programs designed to increase skill sets in math and science through workshops, materials and other tools for teachers and students. Eaton will also work with Shalamuka to identify potential future employees resulting from the programs as it seeks to continue to grow its business in South Africa.
“This agreement is a win-win for all parties involved,” said Shane Kilfoil, managing director of Eaton’s Electrical business in Africa. “This innovative partnership, along with other measures, allows Eaton to qualify for a Black Economic Empowerment (BEE) Four rating, helping our customers, while providing opportunities to support sustainable growth locally as well.” Eaton/Page Two
“We are excited to work with Eaton,” said Philile Maphumulo, director of Shalamuka Capital. “This partnership is a unique approach to helping to improve education, particularly in math and science, while providing sustainable opportunities to accelerate the growth of South Africa’s black middle class.”
Shalamuka Capital is a broad-based BEE private equity company that invests its own funds rather than third party funds. Established in 2008, it invests in unlisted established businesses across all sectors and operates in close partnership with RMB Corvest, a private equity company in the FirstRand Group. The group got it seed capital from RMB. Shalamuka features in its board prominent individuals like Yvonne Chaka Chaka, Athol Williams, Joe Nalane, Kerry-Lee Hurst, Phutumile Dumisa and Stephen Brown.
The group said Empowerdex has verified that target companies invested in by Shalamuka Capital will be treated as 100 percent black-owned on the Broad-Based BEE scorecard and 30 percent black-women owned. Shalamuka’s ultimate beneficiaries (educators and learners of Penreach) are 100 percent black and 90 percent black women.
Established in 1994, Penreach is Africa’s largest school-based program and is concentrated in Mpumulanga, an area with an 80 percent rate of illiteracy. Annually, the program reaches 4,000 educators and 350,000 students at 990 schools.
Eaton employs more than 600 people in manufacturing and support facilities in Johannesburg, Rustenburg, Witbank, Durban, Port Elizabeth, Cape Town and Vanderbijlpark. The company also serves a wide range of local and multinational customers in South Africa including: Mittal Steel, Navistar, Mercedes- Benz, Tata, UD Trucks, Joy Global Mining, Lonmin Mining, Sasol, MAN, Hino, VW Group and Exxaro Mining.