Implemented by the South African government as a vehicle to effect economic change, primarily aimed at addressing the unequal distribution of wealth across race and gender, itâs still regarded by many as a grudge purchase as they feel it hampers entrepreneurship and stifles competition. But a lot of good has come from BEE and the judicious research by companies and NPO/NGOs who have sought out complementary partnerships. One such relationship is between The Love Trust and Networks Unlimited (recently acquired by European based Exclusive Networks).
Effective, sustainable, and well managed NPO/NGOs with the means to invest a portion of their funds to help supplement their income in the form of dividends and shares. The more talented the fund managers that represent the interests of the NGOs are at identifying the right business to invest in, the larger their return. Through The Love Trustâs investment arm, the Lily Investment Trust (LIT) has equity investments in a small portfolio of companies (Networks Unlimited being one of them) and all funds generated through these investments flow through to The Love Trust.
We spoke to Anton Jacobsz, CEO of Networks Unlimited Africa, about their relationship with The Love Trust, their journey through the acquisition process by an international company and the impact this will have not only for them but their stakeholders as well.
A bit about Networks Unlimited:
From its humble beginnings as a single product reseller, run from Wayne Bird and Craig Copelandâs garage in Harfield Village 27 years ago, Networks Unlimited has grown into a multichannel, valued-added IT distribution company of specialist Cyber Security products. The road has had its ups and downs with a near-fatal blow in 2008 when they lost their flagship product. The company has since diversified its portfolio to sustain product loss and expanded its market base to include the rest of Africa. According to Jacobsz, âwe registered our African Head Office offshore in Mauritius, which does all our business across the continent of Africa in the required currencies. We now have offices in Mauritius and Kenya and are in the process of opening new offices in Nigeria. We also have teams currently in Nigeria, Ghana, Madagascar, Botswana, and Uganda. So, we’ve created a good footprint across Sub-Saharan Africa. As a result, our business has grown by a factor of 10 over the last 10 years. We have done exceptionally well, and I think it’s one of the reasons that we were acquired by someone like Exclusive Networks.â
What does this acquisition mean for the company and its stakeholders?
After nearly two years of negotiation, two audits, and months of planning and restructuring, Networks Unlimited (Exclusive Networks Africa) is about to become a force to be reckoned with. âWhat it’s going to do for our business and our partnerâs business, is massive,â says Jacobsz, âthe footprint, the contracts with the Global Systems Integrators and Telcoâs are just the tip of the iceberg. 18 Months ago Exclusive had no representation across Sub Saharan Africa . We now fix the rest of that map for them. And what this means, is that all those entities who do rollouts across Africa and into Europe, who have what they call NOCâs or data centres, that require a managed service for logistics, technical skills and support for these rollouts can look to us for support. It places us as moving from locally relevant to globally relevant.â
Through this acquisition process and because Exclusive is a listed European company, âwe’ve added extra levels of focus around compliance, management and opportunity. So, stakeholders should be a lot more comfortable from an investment point of view and this partnership will bring exponential growth for us and our partners.
Although their 1# BEE status may not translate into gain outside of South Africa for them or Exclusive Networks, Jacobsz points out that as the base of operations for their network into the rest of Sub-Saharan Africa, having and maintaining their BEE status in South Africa is a must. And, in the current climate for IT businesses, Jacobsz feels it vital to have the level of board members to ensure and reassure clients that theyâre running a legitimate business. Networks Unlimitedâs board includes Jacobsz, Bird, Copeland, Abigail Khuluse (representing the interests of The Love Trust).
But why did they choose The Love Trust over other promising partners?
For Jacobsz The Love Trust came with a few things: âFrom a shareholderâs perspective the track record of the Trustees and their ability to blend their social impact focus with their business acumen is key.
âI am a very firm believer in education, particularly at the early stages of childhood. In addition, it is critical that we support this country and the development of this country. What The Love Trust is doing in education, at Nokuphila school and the ECD centres, and what we’re doing to facilitate learning in the townships, to me, that’s very important.â
Networks Unlimitedâs relationship with The Love Trust:
Many empowerment deals are done through introductions. If the team are all strangers to you there could be hidden risks around the partnership and their contribution.
âThe fact that The Love Trust has a credible track record, enabled us to be a lot more comfortable in terms of what deal we were getting and who we would be working with. In many deals around BEE there is almost always a requirement for discounting the share price.
âWhat we experienced with The Love Trust was totally the opposite: they paid fair value for the shares and naturally expect growth in return. They have a very solid representation on the board that not only looks after the interests of The Love Trustâs money but also works with us to understand what we’re doing and to help to bring about alignment. Outside of that, I think it’s great for my team to go off-site and spend time around a good cause.â
But, partnerships arenât just mutually beneficial transactions. Partnerships are relationships, and as such, the strongest and most effective ones are those that we have a personal connection with â the ones that make us feel and resonate with our core beliefs. They motivate us and challenge us. They make us feel that we matter, that weâre contributing and making a difference. So, when choosing your business partners, and your BEE partners, take the time to consider who they are, what youâll be contributing to and if this aligns with your own core values. This means making a deliberate choice over a convenient one that should be the best one in the long run.
