XLink Communications has sold a 25% stake to empowerment group Pan-African Capital Holdings, for an undisclosed amount.
XLink provides wireless-based EFT communication solutions and continues to develop in the fast-growing sector of machine-to-machine communication solutions.
Pan-African is a black-owned and managed financial services company, which specialises in financial structuring, investment banking advisory services, equity investment, fund management and economic research. It has interests in several sectors such as hospitality, agriculture and technology.
XLink CEO Anton Leal says Pan-African was a good fit because the company has interests in other sectors, such as in hospitality, which is a target market for XLink. He adds the empowerment partner supports an entrepreneurial mindset.
XLink is now a level four empowerment contributor. According to the Department of Trade and Industry, level one is the highest possible achievement.
Leal explains the company's objective in selling an empowerment stake was to ensure it could secure corporate work, as many companies require their suppliers to be accredited. In addition, he says, XLink also wanted to take advantage of opportunities in the private sector.
XLink has more than 26 000 retail clients and over 40 000 EFT units deployed nationally. It provides communication services for more than 180 million transactions a year.
Long hunt
XLink, in which Vodacom Ventures has a majority shareholding, had spent a “couple” of years looking for the right empowerment partner, says Leal. He adds that XLink, formed in 2004, is a young business.
Leal explains the transaction is a straight-forward business deal and Pan-African's stake is not encumbered by debt.
Pan-African Private Equity Fund CEO Zuko Kubukeli says: “Our investment strategy is to partner with like-minded, entrepreneurial owners and managers of niche, high IP businesses. In XLink, we believe we have found that combination and are excited about the prospects that lie ahead for XLink”.
After the deal, Vodacom Ventures will own 54%, Pan African 25.1% and XLink Management the balance of the company. Vodacom Ventures bought an initial 35% in 2007.
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