EMC SA
has bought an equity stake in a local company, in a BEE deal that it describes is a first for the South Central and East African (SECA) region.
The local subsidiary of the New York-listed information infrastructure solutions company concluded an investment deal with Enterprise Content Management Solutions (ECMS) that will give it technical resources in future projects it hopes to conduct in Africa.
EMC SA country manager Gerhard van der Merwe says the deal with ECMS, a subsidiary of Waymark Infotech, is definitely a first in SECA. "There may have been a similar deal done in northern Africa, but - as far as we know - EMC has not done something like this in SECA."
Neither company would reveal the value or the size of the equity stake that was sold under the arrangement.
Van der Merwe says that with the new equity in ECMS, EMC SA will be able to subcontract certain projects to ECMS. "Before we would approach a local company with a project and they could decline, but now we can say to them that we have equity in the company so they will have to comply." The deal will see the two create a content management solutions division that will service the content management and archiving needs of businesses in SA and Africa.
The deal will also strengthen ECMS's local resources and give it a competitive advantage in the market. "This important investment gives EMC an expanded and stronger channel that can help deliver ECM solutions to the SA and African markets. With Waymark, we are creating a specific competence around content management and archiving (CMA)."
Waymark Infotech managing director Pikie Monaheng was quoted saying that the deal was influenced by empowerment requirements.
"Empowerment is one of the business drivers in the South African economy. Waymark will help EMC extend its reach in the CMA market, while also enabling EMC to meet its strategic goals for broad-based black economic empowerment compliance," he said.
Africa Analysis media analyst David Moore says the deal is probably the biggest he has heard of in the region. "There are other companies on the continent that have made deals along similar lines, but, as far as I know, this is the largest."
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