Africa's leading business continuity and disaster recovery service provider, ContinuitySA, has announced that CoroCapital, a subsidiary of Coronation Investment and Trading, will become its new business partner and will effectively acquire a 49% equity stake in ContinuitySA. This arrangement will see the Dialogue Group disposing of its 51% holding in ContinuitySA for a cash sum of R35 million.

Implementation of this agreement is of course subject to the various conditions precedent, in particular Competition Commission approval, as laid out in the Dialogue Group Holdings Limited SENS announcement of 26 October 2010.

“The challenges facing the Dialogue Group and a vision for continued growth by ContinuitySA steered the company to find another partner that would support this strategy,” says ContinuitySA CEO Allen Smith. “ContinuitySA engaged with CoroCapital some time ago with regard to the company becoming a shareholder and this resulted in an agreement in which the Dialogue Group will sell its 51% share in ContinuitySA to the investment specialist.”

CoroCapital is an investment banking specialist focusing on quality unlisted and listed equity opportunities.

“ContinuitySA has remained profitable during the turbulent and recessionary times of 2008 and 2009, and continues to be profitable in 2010,” adds Michael Davies, financial director of ContinuitySA. “Our operations in South Africa, Botswana, Mozambique and Mauritius continue to perform and the opening of a new recovery site in Somerset West earlier this year has given us extra capacity with which to serve customers in the Western Cape.”

“We are delighted to combine CoroCapital's financial strength with ContinuitySA's proven track record in providing its blue-chip clients with a total business continuity solution,” says Peter Vogel, executive director of CoroCapital. “Given that South African corporations are investing more effort and time into the areas of risk management, business continuity, crisis planning and the provision of business recovery facilities, it is CoroCapital's view that ContinuitySA is well positioned to continue its growth path in offering these critical services.”

In addition to the R35 million consideration, the directors of ContinuitySA have agreed to declare a special dividend to its current shareholders in the amount of R4 million. Of this amount, R2.04 million will accrue to Dialogue based on its 51% ordinary shareholding.

As part of the transaction, the Continuity Investment Trust, represented by the management and staff of ContinuitySA, will acquire 2% of the company's equity from Dialogue, resulting in a new shareholding, comprising the Continuity Investment Trust at 51% and CoroCapital at 49%.

“Together with CoroCapital, ContinuitySA is facing exciting prospects and we look forward to continued growth in South Africa and into Africa,” says Vogel.