Imvula Education Empowerment Fund Trust is embarking on its first investment in a JSE-listed company through its broad-based black economic empowerment (BBBEE) agreement with Ellies Holdings.
The R18.5-million deal will see Imvula acquire 185-million ordinary Ellies shares, representing a 23% stake in the company, at 10c apiece.
Imvula's share purchase, which did not attract any discount to the prevailing market price at the time of closing the deal, includes a 10-year lock-in and is paid for in cash.
Ellies represents an attractive investment opportunity for Imvula as an iconic South African brand whose products have been trusted by South Africans for decades, said Imvula founder and CEO Dr Taddy Blecher.
“Imvula is focused on adding real commercial value through helping build a South African company and brand we believe in, where the fundamentals are sound. As black shareholders, we were looking for fair value and a platform to build a long-term future, not quick gains at the expense of other shareholders,” he said.
Founded in 2009, Imvula is a BBBEE development trust supporting the youth beneficiaries of the award-winning Maharishi Invincibility Institute, which aims to provide talented but historically disadvantaged black youth with access to quality tertiary and vocational education and a holistic structure to support their education and developmental needs.
Since inception, the programmes have educated and placed over 19 000 individuals into successful careers, collectively earning more than R1.43-billion a year, with an estimated career income potential of R41.85-billion that will flow into the economy.
Imvula will benefit from the potential returns on its equity investment and partner with Ellies on additional socioeconomic development programmes in the communities where Imvula is active, thereby creating an immediate benefit loop for its beneficiaries sustainably.
For Ellies, the transaction will result in a material improvement in its empowerment credentials to a Level 4 BBBEE status and the ability to fund expansion programmes in line with its strategy through the capital injection.
“Over the years, we have demonstrated our ability to partner with top South African corporates that are passionate about education and meaningful development for women and youth. But to continue expanding our programmes, we needed to broaden our approach to equity partnerships. We look forward to engaging with other listed companies such as Ellies that have a passion for the youth and can help the Maharishi Invincibility Institute continue to offer quality education and facilitate employment opportunities in the formal sector for young South Africans for decades to come,” Blecher continued.
Imvula and its associated trusts have active equity agreements with 23 companies, including Fleishman Hillard, Manpower Group SA, Bryte South Africa, Nahana Group (FCB), Experian-Compuscan, Opentext and Instinctif Partners South Africa, besides others.
“These long-standing relationships provide the financial support and networks to continue to meet the needs of disadvantaged youth in South Africa, and the results have garnered international attention,” he concluded, noting that Imvula supports the belief that BBBEE is one of the best tools to transform South Africa and build the economy's strength as long-term anchor stakeholders.