FoneWorx, an Alt-X listed telecoms and IT solutions provider, has entered into back to back transactions to repurchase a 30% stake in the group currently under control of the Industrial Development Corporation (IDC), for a price of between 130 and 139 cents per share.
It will then sell those shares to Isaac and William Kirsh at the same price, at a value of between R53 million and R56.7 million.
According to FoneWorx, the transaction marks the first step in the development of a strong strategic relationship between FoneWorx and the Kirsh Family’s interests. The group aims to take a new strategic direction, “and it is considered that FoneWorx’s businesses, in addition to continuing to pursue existing market leading growth strategies, will be highly complementary to the anticipated way forward,” the group said.
FoneWorx has, over the last six years, delivered a 22% compound annual growth in turnover to R91 million, and over the same period delivered compound net profit growth of 50% up to R19.5 million.
FoneWorx reported a 14% rise in revenue to R52.5 million, for the six months ended December 2011. In the same period PBIT increased by 16% to R14.2 million and the PBIT margin was 27% versus 26.5% in the comparable period in the prior year.
Talking about the transaction, FoneWorx CEO, Mark Smith said: “The IDC have been very supportive but passive shareholders. However, Issie and William Kirsh, respected South African entrepreneurs, will join us as strategic, value enhancing shareholders. Their investment in FoneWorx creates a strong platform for growth with a longer term vision of aligning FoneWorx with assets the Kirsh Family have built up recently.”
Post the transactions, the Kirsh family will own 33% of FoneWorx. The balance of the shareholding is, in the main, owned by the directors of the company.
“We have a strong balance sheet and cash on hand approaching R100 million, which provides a solid foundation for investing for the future of the business.” Smith said.