The South African JSE listed Enterprise Systems giant EOH Holdings has taken the expected step in increasing its dominance across Africa and plans to grab a 49 to 80 percent stake in local SAP consultant and enterprise outfit, Twenty Third Century Systems.
In a press release, EOH commended TTCS footprint across Africa and gave the direction of the deal as an Africa growth strategy for both companies. Outside of South Africa, the award-winning Ellman Chanakira-led TTCS has established a broad footprint across Africa in Zambia, Malawi, Kenya, Uganda, Rwanda and Nigeria, offering enterprise solutions as an SAP partner to large conglomerates in Transport, Communication, Energy, Mining, and governments departments. It would make sense that EOH.
TTCS, on the other hand, is rather silent going into this merger. While EOH released a press statement available on their website, TTCS has refused to comment on the development leave to say the transaction is still under discussion.
There have notable mergers between rivals-of-sorts in ICT such as in the IBM and Lenovo or the Time Warner and AOL mergers. Some mergers are however not born out of mutual profiting. There is usually one partner that has the financial upper hand and more or less dictates the terms and conditions of the relationship. The Facebook takeover of WhatsApp and Windows takeover of Nokia are good examples.
While it hasn’t been explicitly stated how this relationship will benefit the two prospective partners, there is a lot of room to speculate. The fact that the Zimbabwean economy has indeed been faced with persistent adverse economic conditions points to the deal being born out of a need for financial support.
Cash flow is terribly dwindled and liquidity is scarce in the market. This has seen the huge firms in energy, finance, mining and so forth, who previously could afford weighty enterprise systems such as SAP, struggling to sustain and naturally switching to lesser or alternate technology.
These conditions, coupled with the fact that TTCS has been on an ambitious expansion drive over the past five years, including opening offices in Ghana, Kenya (2011) and Nigeria (2013) may be cause for stringent measures.
Though there haven’t been any reports of TTCS struggling financially, the Zimbabwe picture does not augur well for TTCS, or any business for that matter. While this has been happening on a macroeconomic level, TTCS has been receiving accolades locally and across Africa, something that has given the firm the reputation of a survivor in a tough environment.
The distinctive 49 – 80% takeover, depending on the country, may also be cause for speculation on TTCS’s need to observe Zimbabwe’s Indigenisation policy dictates that restrict foreign investment to 49% of an indigenous company.
Does this mean that EOH actually intended to invest more into the company but could not? The inclusion of a varying Africa-wide branches acquisition may be meant to circumvent this hurdle where in fact EOH will emerge the larger shareholder.
Another highlight is the training of graduates into SAP support which has seen TTCS churn out qualified SAP consultants into Africa since 2011. TTCS may be shifting from the core system software and infrastructure provision to SAP support while leaving the heavier lifting to EOH.
All the same as the story develops, we will definitely keep you updated.
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8 thoughts on “EOH takes over Zimbabwean enterprise firm, Twenty Third Century Systems”
Why does 100% of this article sounds like speculation?
They’ve been ‘churning out’ SAP consultants for far longer than that
Poor journalism, no facts just speculation.
Here comes Sage ERP X3 V7 hot on the heels of SAP
Good investment i guess hope this will bring more tech in Zim and also puts Zim on the Enterprise Tech market.
Hope TTCS will benefit heavily from this deal
TTCS has been financially struggling for some time now with employees going for months without receiving their salaries and doesn’t look like it will end soon so this article would have known better if the writer researched well… I have people I personally know who work for TTCS and they are struggling partly cos of outstanding salaries
Thought it was common knowledge in the Tech corridors of Zimbabwe that TTCS has been struggling. In as much as it is struggling cash flow wise, EOH sees greater benefit other than the Zimbabwean market and the “Receivables”, in the form of a Massive Pool of SAP consultants that can easily be deployed to SAP projects globally
Hapana chingabude if young girls suck out the money like that. Painting all countries red at business expense. How can you promote a new graduate to managing sales after only 3 years experience. Theory and practical is different. If you use face powder then yes; but the company will dwingle. Well done SAP
Hapana chingabude if young girls suck out the money like that. Painting all countries red at business expense. How can you promote a new graduate to managing sales after only 3 years
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