The business, which currently sits under EOH Mthombo, is being bought by a black-controlled consortium called K2020893770 for cash.
The consortium is made up of One Thousand & One Voices Management (Mauritius) and Crossfin Technology Holdings and their black economic empowerment partners led by Isaac Mophatlane, the co-founder of Business Connexion, now BCX with his late brother Benjamin Mophatlane.
One Thousand & One Voices Management, or 1K1V, is a global private equity fund while Crossfin is an investment holding company that invests in high-growth and established cash-generative fintech business.
The base purchase price, after adjusting for net debt, non-operating assets and working capital, equates to an enterprise value of US$30.3 million.
Established 30 years ago, Sybrin provides bespoke solutions to the financial services sector and government and has 250 employees, about 100 clients and 7,500 users in 17 countries.
EOH bought Sybrin in 2013, however, the business is now “at a stage where it is well positioned to leverage its proven track record and significantly scale its innovative technology across several geographies”, EOH said in a statement to shareholders.
“The limited capital available to EOH at the current time hinders the rate at which Sybrin is able to expand and grow its business. This transaction not only represents a significant milestone in EOH’s deleveraging plan, but the consortium is also the right partner to unlock Sybrin’s full potential, enabling both future growth and international expansion,” EOH said.
“The proceeds of the transaction, net of costs, assist EOH in creating a more appropriate capital structure and will primarily be applied to reduce debt, with the remainder of the proceeds utilised for working capital requirements.”
1K1V CEO Hendrik Jordaan said in a separate statement that his company, which acts as a “bridge between Africa and the US and vice versa”, intends to help Sybrin “expand its footprint internationally and unlock synergies with our existing technology investments.”
“The proceeds of the transaction, net of costs, assist EOH in creating a more appropriate capital structure and will primarily be applied to reduce debt, with the remainder of the proceeds utilised for working capital requirements”EOH
“Crossfin’s strong track record of investing in high-growth, cash-generative businesses made it a natural partner for this investment. The same goes for Isaac, a non-executive board member and investor in Crossfin, who has a deep understanding of African technology investments,” Jordaan said.
Crossfin CEO Dean Sparrow said in the same statement: “Sybrin has become a leading enterprise software solutions provider and its focus on fintech and regtech (regulatory technology), underpinned by rapid enterprise application development and delivery, makes it extremely complementary with other companies in the Crossfin portfolio.”
“We are confident in the growth opportunity of a technology-led financial services sector globally and see considerable cross-selling opportunities within Sybrin’s customer base and across the diverse African countries in which it already has a presence,” the statement added.
The sale is subject to Competition Commission approval and must also be approved by the financial surveillance department of the South African Reserve Bank.
Consent too is required from the lenders to EOH, too and it’s dependent on the consortium securing funding to complete the deal.