Black-owned Mthombo IT Services (M-IT) is to merge with JSE-listed Enterprise Outsourcing Holdings (EOH).
The merger will create a 25% black-owned entity with more than 900 staff members, of whom 38% are previously disadvantaged.
At the same time, EOH has finalised its long anticipated staff empowerment deal through the creation of the Mthombo Trust.
EOH says it will issue 8 million shares and R6 million cash to the vendors of M-IT, Lucky Khumalo and Nkosinathi Khumalo. The shares were worth R33.2 million at yesterday`s closing price of R4.15.
EOH will also issue 9.18 million shares to the Mthombo Trust, the beneficiaries of which are the previously disadvantaged staff - both present and future - of EOH and M-IT.
Asher Bohbot, EOH`s CEO, says the deal adds value to both EOH and M-IT in the form of new market opportunities, operational management, skills development and black empowerment.
"This deal not only provides EOH with new avenues for business but will also play a vital role to ensure we continue to make our contribution to a changing SA," he adds.
"We are passionate and extremely proud of this transformation merger because it makes business sense and not just charter sense."
Lucky Khumalo and Nkosinathi Khumalo are to be appointed to the EOH board.
The deal is subject to regulatory and shareholder approval. Shareholder approval will also be needed to introduce the company`s staff as broad-based empowerment shareholders through the Mthombo Trust.
The EOH share price rose on the news, with the share trading at 430c early this afternoon. Earlier in the day it reached 440c.
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