Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.

Enterprise

EOH Offloads CCS Stake for $31M

Article Image
South African IT services firm EOH has sold a controlling stake in Construction Computer Software (CCS) to a German company for R444 million (US$31 million) as part of a broader debt reduction strategy.

The deal involves an EOH subsidiary, EOH Mthombo, selling a 70% stake in CCS to RIB, a subsidiary of German-listed RIB Software. There is also a "reciprocal put/call option" to buy the remaining 30% after December 2022.

This deal falls into EOH's bigger plans to unlock R1 billion ($71 million) in cash through strategic partnerships and targeted disposals as a way to reduce the group's debt. The plan was announced by EOH CEO Stephen van Coller at the group's interim results presentation in April.

At the time van Coller said that the group had identified assets it wanted to sell to strategic partners and that the sales would take place over the next three to 12 months.

"The proceeds of this transaction will go a long way to creating a more appropriate capital structure and will be applied mainly to a reduction of the EOH's debt and to a lesser extent, for working capital requirements," EOH said in a statement about the CCS deal.

EOH CEO Stephen van Coller.
EOH CEO Stephen van Coller.

CCS is a key provider of enterprise software solutions for the construction and engineering industries.

RIB Software is involved in the digitization of the construction industry with its software technology combined with a cloud platform approach to software services. RIB is operational in almost 30 countries, has more than half a million licensees and is focused on growing that number to two million over the next two years.

EOH believes that CCS's access to RIB's broad development network, international business analysts and development teams will "greatly enhance CCS' growth strategy." EOH will still be able to benefit from the anticipated growth trajectory through its remaining 30% holding in the company.

"This transaction is a significant milestone in EOH's strategy to align with key partners which enable the scaling up of unique software businesses identified within the group's fold. It is also a crucial step forward for EOH's IP division and RIB is the right partner to unlock CCS's full potential, enabling both growth and internationalization," the company said.

The IT services company has had a tough time of late and its interim results for the six months ended January 31, 2019 showed a substantial headline loss per share and flat revenue. The group reported a headline loss per share of 973 South African cents (69 US cents), compared to headline earnings per share of 314 South African cents (22 US cents) the previous year. This resulted in a headline loss of R3.3 billion ($230 million) for the six months, while normalised revenue was flat at R8.194 billion ($580 million).

The group's share price on the Johannesburg Stock Exchange (JSE) has fallen by 39% during the past year, hit by worries over governance concerns and more recently fallout after the cancellation of a Microsoft channel partner agreement after an anonymous tip-off about alleged malfeasance.

Following the allegations EOH initiated an internal investigation, supported by law firm ENSafrica, into its channel partner business unit. The investigation was expected to be concluded by the end of May and a report given to the board, with a promise to later make the findings public.

Paula Gilbert, Editor, Connecting Africa

Innovation hub

Story

Twitter announces first African office in Ghana, begins hiring

Twitter has announced it is planning to open an office in Accra, the Ghanaian capital the first in Africa for the social media giant.

Story

Hot startup of the month: Nigeria's OnePipe

This month's hot startup is Nigeria's OnePipe, which is aggregating APIs from banks and fintechs into a standardized gateway that is easy to integrate and makes partnerships seamless.

More Innovation hub

Industry announcements

More Industry announcements

AfricaCom perspectives

Story

Digital inclusion as a catalyst for economic empowerment: Mastercard's Imelda Ngunzu

Mastercard's Imelda Ngunzu talks to Connecting Africa about how digital payment solutions and mobile money are transforming the lives of small business owners, women and marginalized groups in East Africa.

Story

Accelerating women in STEM: In conversation with GirlCode's Tinyiko Simbine

GirlCode co-founder and CFO Tinyiko Simbine talks about why it's important to help girls and young women excel in science, technology, engineering and mathematics (STEM) fields.

Story

How Poa Internet is unlocking meaningful connectivity in East Africa

Poa Internet's CEO Andy Halsall shares his views on what it takes to develop last-mile connectivity and get Africans online in a meaningful way.

More AfricaCom perspectives

Flash poll

All polls

Latest video

More videos

Upcoming events

East Africa Com
May 11-12, 2021
Virtual Event
Africa Tech Festival
November 8-12, 2021
Cape Town, South Africa
More Upcoming events

Sponsored video

More videos

Partner perspectives

How mobile operators in Africa can address signalling threats and secure the network
By Katia Gonzalez, Head of Fraud and Security at BICS

SD-WAN and satellite how MNOs and telcos can enjoy the best of both worlds
By Ofer Asif, SVP BizDev, marketing and strategy at Spacecom

Africa's mobile operators need better roaming monetization for growth
By Damion Rose, product manager for Mobile Signaling and Roaming Solutions at BICS

All Partner Perspectives

Like us on Facebook

Newsletter Sign Up


Sign Up