Private equity firm Safika Investments has acquired a 35% stake in Molapo Technology for an undisclosed amount.
The transaction results in Molapo being 61.1% black-owned, with the balance of the firm held by management and RMB Corvest.
Molapo focuses on the repair of electronic telecommunications equipment in the fixed-line and mobile services arena. The business has 30 customers, the largest of which is Telkom.
"Safika's involvement and the resulting black-owned entity will allow us to secure additional Telkom work by complying with the stringent empowerment requirements in terms of our service level agreement with this client," says Molapo chairman Gavin Hart.
"It also puts us in a position to secure contracts with other major telecom players."
Molapo said in a statement it was one of a handful of suppliers worldwide that can repair Telkom's current backbone equipment due to the age of such technology. Telkom uses a number of OEM products such as Ericsson, Alcatel and Siemens.
Growth ambitions
The company has targeted new clients in the international arena, as well as South African service providers such as MTN and Vodacom. It recently secured a number of international contracts with T-Mobile (UK), a Deutsche Telekom subsidiary, and AT&T.
Safika Investments, a partnership between Safika Holdings and RMB Corvest, has participated in a number of black economic empowerment private equity deals over the past two years.
"As Molapo Technology gained market share in this sector, a powerful empowerment partner like Safika Investments was key," says Moss Ngoasheng, chairman of Safika Holdings.
He adds that Safika Investments was initially attracted to Molapo Technology because of its existing relationship with investment partner RMB Corvest, and its strong annuity revenue base. RMB Corvest was previously a 30% shareholder prior to the introduction of Safika Investments.
As a result of the deal, an additional 25.1% of the shares in the company have been allocated to Molapo's black employees directly and indirectly.
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