Dimension Data’s black economic empowerment (BEE) transaction has delivered an unencumbered R1.26bn to beneficiaries which include prominent BEE player Andile Ncgaba.
While the details surrounding distribution of benefits across the beneficiary groups was not unveiled the maturing of this deal may come to confirm Ncgaba as one of the most successful black business players of the post 1994 South Africa.
Through his vehicle Convergence Partners, Ncgaba has made serious inroads into becoming a new Randlord. His list of remarkable deals will include the transaction which diverted Telkom stake from its erstwhile international partners, Thintana, into the BEE styled Elephant Consortium in what became money for jam. Ncgaba maintains a low profile and as such is largely forgotten when lists of the new emerging Randlords are compiled. Surely he is in the class of what is known as black High Net Worth Individuals or multi millionaires which includes individuals like Patrice Motsepe, Cyril Ramaphosa, Tokyo Sexwale, Saki Macozoma, Mike Teke, Sipho Nkosi etc.
In a statement released yesterday Dimension Data said its eight years old BEE deal has matured to claim one of the best value creating status within the BEE world. “In value creation terms, this is one of the most successful BEE transactions in South Africa across all sectors,” said Dimension Data chairman Jeremy Ord.
The deal signed in 2004 for R380m delivered 25% of Dimension Data Middle East and Africa (DDMEA) division to a consortium of broad based BEE beneficiaries. In addition to Ncgaba it featured Saki Macozoma’s Safika Holdings, DDMEA black employees and a group of BBBEE schemes. Safika Holdings disposed its interest in 2010.
Ord said “The BEE vesting represents another milestone in Dimension Data’s 30 year history. Although the Group was acquired by Japan-based NTT in 2010 – and before that held its primary listing on the London Stock Exchange – the local shareholding in DDMEA remained intact, and we remain a proudly South African company headquartered in Johannesburg. We are extremely proud of what Convergence Partners and DDMEA have achieved together”.
Through his vehicle Convergence Partners Ncgaba said he will be reinvesting into DDMEA together with some BBBEE schemes. The group said DDMEA black employees will receive their payout on September 7 (Friday).
Ngcaba, who serves is chairman of DDMEA “When the transaction was signed over eight years ago, the vendor-financed structure was extremely innovative in that it enabled the consortium to earn equity in the company. At the same time, we drew up an internal transformation charter to ensure that DDMEA addressed all the pillars of transformation including management, education, and corporate social responsibility”.
“Our broad-based groups – represented by the Dimension Data Community Development Trust in the future – are critical to sustainable development in South Africa. Our goal is to ensure they are provided with ongoing business support and guidance. In addition, the groups in the Dimension Data Community Development Trust will receive an annual financial distribution so that they can expand their services and grow their reach within their communities.”
Ncgaba received praises from Ord who said “Andile has played a key operational role transforming the DDMEA business. Transformation is an ongoing strategic business imperative – not a period in time or a transaction – and the Group remains committed to deepening transformation across the business”.