EOH Holdings subsidiary EOH Mthombo has sold Mars Holdings and its principal business Syntell to a consortium led by current Syntell executive directors for a base price of R211-million.
The consortium is made up of Mark Chewins (Syntell’s CEO), Ametje Rist (its chief financial officer) and Mike Hellens (an executive director) as well as companies Newport Investments and Reonet.
“The transaction is in line with EOH’s stated strategic intention of selling non-core assets as it seeks to right-size the group and deleverage its balance sheet,” EOH said in a statement to investors after markets closed in Johannesburg on Wednesday.
EOH bought Syntell in 2016.
“Syntell requires significant capital investment in the coming years to develop key technologies to exploit market opportunities,” EOH said. “Given the limited capital available to EOH until such time as the balance sheet is deleveraged, coupled with the extensive knowledge and access to capital that the management consortium possess, the value of Syntell to EOH is better optimised through a sale to a new shareholder.”
EOH will use the proceeds of the sale to reduce debt. Some of the money will be used for working capital requirements, it said.
Syntell describes itself as a “market leader in road safety and traffic management in Southern Africa”.
The consortium buying Syntell has paid EOH the R211-million base price in cash. A shareholder loan from EOH of R10.5-million was settled by Syntell prior to the signature date of the sale agreement.
EOH is expected to publish its annual financial results to 31 July 2020 next Thursday, 26 November. — © 2020 NewsCentral Media