ContinuitySA set for growth with R35m Dialogue buyout
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.
ContinuitySA is Africa's leading provider of business continuity management and related services. The company boasts some of the continent's most highly skilled and qualified business continuity and disaster management experts who help companies, organisations and government departments of all sizes prepare for and deal with all eventualities. These include potential threats, events, incidences and unforeseen or sudden disruptions due to human error or natural events.
ContinuitySA also provides a variety of hosting solutions, ranging from co-located to fully managed virtualised environments, with their primary focus being to ensure its clients are able to address the resilience and recoverability of their IT services. These hosting services are complemented by managed backup and recovery services, virtual server replication and high availability solutions to satisfy any level of continuity requirement.
ContinuitySA operates the largest recovery facilities in southern Africa. It has a number of recovery centres in southern Africa with over 20 000 square metres of recovery facilities in Midrand, Gauteng. Smaller sites have been located in Cape Town, Gaborone, Botswana and Mozambique, and a joint venture has been established in Mauritius.
ContinuitySA. Our business is keeping you in business. Additional information about ContinuitySA can be found at www.continuitysa.com.