What a difference the right BEE partner can make
For anyone doing business in South Africa, Broad-Based Black Economic Empowerment (B-BBEE or BEE) is unavoidable, and your BEE status determines a lot in terms of your potential growth as a company.
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, it’s 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).
Through The Love Trust investment arm, the Lily Investment Trust (LIT) has equity investments in a small portfolio of companies (Networks Unlimited being one of them) and the proportionate funds generated through these investments flow through to The Love Trust.
Anton Jacobsz, CEO of Networks Unlimited Africa, speaks 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 Copeland’s 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. Networks Unlimited has offices in Mauritius and Kenya and are in the process of opening new offices in Nigeria. They also have teams currently in Nigeria, Ghana, Madagascar, Botswana, and Uganda with a good footprint across Sub-Saharan Africa. As a result, the business has grown by a factor of 10 over the last 10 years. The company has done exceptionally well, and Jacobsz believes that’s one of the reasons they were acquired by Exclusive Networks.
What the acquisition means 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. What it’s going to do for the business and their partner’s business, is massive and. places them as moving from locally relevant to globally relevant, Jacobsz adds.
Through this acquisition process and because Exclusive is a listed European company, the company has added extra levels of focus around compliance, management, and opportunity. So, stakeholders should be a lot more comfortable from an investment point of view.
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 they’re running a legitimate business. Networks Unlimited’s board includes Jacobsz, Bird, Copeland, Abigail Khuluse (representing the interests of The Love Trust).
Why The Love Trust was the right choice
For Jacobsz The Love Trust came with a few things; From a shareholder’s perspective the track record of the Trustees and their ability to blend their social impact focus with their business acumen is key. Jacobsz is a very firm believer in education, particularly at the early stages of childhood. In addition, it is critical that the country and its development be supported. What The Love Trust is doing in education, at Nokuphila school and the ECD centres, and what Networks Unlimited is doing to facilitate learning in the townships is very important.
Networks Unlimited’s relationship with The Love Trust
The fact that The Love Trust has a credible track record, enabled Networks Unlimited to be a lot more comfortable in terms of what deal they were getting and who they’d would be working with.
Jacobsz adds that we as The Love Trust have a very solid representation on the board that not only looks after the interests of our money but also works with us to understand what Networks Unlimited is doing and to help to bring about alignment. Outside of that, it’s great for the Networks Unlimited team to go off-site and spend time around a good cause.
What makes a good partnership
Partnerships aren’t 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 – 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 we’re contributing and making a difference. So, when choosing your business partners, and your BEE partners, take the time to consider who they are, what you’ll 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.