Johannesburg - Zensar Technologies, an Indian information technology (IT) firm operating in South Africa, has concluded a black economic empowerment (BEE) deal giving investment holding firm Kapela and the Tomorrow Trust a stake of 25 percent plus one share.
The parties will set up a BEE company, Zensar South Africa, in which the Indian entity will be the majority shareholder. This set-up would enable Zensar to grow its presence in the country and expand its services into new customer segments, the company said yesterday.
Kapela would get two board seats in exchange for the business acumen and networks of its directors and shareholders, Kapela executive chairman Israel Skosana said.
The Tomorrow Trust, a non-governmental organisation attending to the educational needs of orphaned and vulnerable children, is also represented on the Zensar SA board.
Zensar established itself in South Africa 12 years ago offering IT outsourcing services and its clients include major corporates Investec, Discovery, Liberty, Standard Bank, Sanlam, Harmony Gold, Woolworths, Avis and Net Florist.
The firm employs about 750 people locally.
The BEE deal could improve Zensar’s empowerment rating to level 3 or level 2 from level 4, said Harish Lala, the regional head for Zensar’s African operations. The firm had invited a BEE rating firm to assess it, Lala said.
Kapela has concluded deals with several companies, including Marsh South Africa and XON. The firm intends to expand into the public sector.
The BEE codes of good practice exempt international firms from having to sell equity but require participation through skills development and local procurement targets.
Ganesh Natarajan, the vice-chairman and chief executive of Zensar Technologies, said: “We are encouraged to expand on a much larger scale.”
He declined to reveal the value of the deal or how it was funded, citing constraints due to the firm’s listing on the Bombay Stock Exchange.
Zensar has been active in skills development in South Africa and has operated a learnership development programme for students from previously disadvantaged groups to train them locally and in India in IT skills.
More than 200 students have been trained and about 80 have been employed at the firm.
Lala said a strategy was being developed for expansion into the public sector.
The company is also pursuing further growth in Kenya and Nigeria.
Ten percent of its global revenue is derived from Africa, the group’s third-largest market, where the company employs about 7 000 people.
Kim Feinberg, the chief executive of the Tomorrow Trust, said Zensar SA’s corporate social investment budget would be channelled to the trust, but declined to reveal the amount.
Skosana is a former chief executive of SA Express and a founder member and past president of the Association for the Advancement of Black Accountants of Southern Africa.
Kapela’s other directors and shareholders include Daphne Motsepe, the former chief executive of unsecured lending at Absa; Makhup Nyama, a director of Tiger Brands and a former chief executive of the Saab Grintek group; Fatima Abrahams, an industrial psychologist and a University of the Western Cape professor; Claudia de Villiers, a chartered accountant; Henri Staal, a former joint chief executive of Ernst & Young’s management consulting division and a past chief executive of Adcorp; and Johan Kritzinger, a past managing partner of Ernst & Young’s corporate finance division. - Business Report