EOH disposes of software unit for R440 million
Listed ICT group EOH has announced the conclusion of a deal that will see it dispose of a 70% shareholding of enterprise software group, Construction Computer Software (CCS) for R444.4 million.
The deal is with German software group, RIB Limited, which will see the latter ultimately acquire the full 100% shareholding of the business. Advisory and investment firm, Delta Partners acted as financial advisors on the deal.
CCS is a key provider of enterprise software solutions for the construction and engineering industries. RIB leads the digitisation of the construction industry with its software technology combined with a market leading cloud platform approach to software services.
The agreement was struck at 8.5x EBITDA, and the companies have entered into a reciprocal put/call option, in terms of a shareholder’s agreement, for the disposal of the remaining 30% percent of the issued share capital of CCS at the same multiple applied to 31 December 2022 adjusted EBITDA.
90% of the purchase consideration is payable in cash on closing, following fulfilment or waiving of all conditions, EOH said.
The remaining 10% will be held back by RIB as security for any shortfall in warranted financial results or claims against EOH. The balance due will be payable to EOH in cash by no later than 31 July 2021.
According to EOH, through its remaining 30% holding of CCS, EOH will participate in the company’s growth trajectory, while potential also exists to grow its relationship with RIB to a broader partnership in cloud and development services.
“EOH management, at the interim results period, stated that it would unlock R1 billion in cash through strategic partnerships and targeted disposals in order to reduce the group’s debt.
“The proceeds of this transaction will go a long way to creating a more appropriate capital structure and will be applied mainly to a reduction of the EOH’s debt and to a lesser extent, for working capital requirements,” the group said.
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