Last month two prominent Cape Town-based empowerment companies Grand Parade Investments (GPI) and African Empowerment Equity Investments (AEEI) strongly signalled their ambitions to look for cross border opportunities.
GPI recently announced that it had acquired a 4,95% stake in Australian gaming company Atlas Gaming Holdings for R5,6 million, while AEEI – via its Health Systems Technologies (HST) subsidiary – landed a contract with the Tanzanian Ministry of Health to implement Laboratory Information Management Systems (LIMS).
Admittedly both deals are small in relation to the respective group’s investment portfolios. GPI holds anchor investments in the GrandWest and Worcester casinos as well as owning the master franchise agreement for Burger King in SA. AEEI’s biggest investment is in Premier Fishing along with promising strategic investments in Pioneer Foods, British Telecoms and SAAB SA.
But both companies are likely to look to developing a more meaningful presence outside SA.
In GPI’s case, it is interesting to note that although Atlas Gaming develops gambling machines for the Australian domestic market, the proposed transaction was aimed at opening the African market via GPI.
The way the deal works is that GPI will use its cash reserves to acquire the initial stake in Atlas along with Synot, a Czech-based gaming company, also subscribing for a similar shareholding.
After this initial subscription both GPI and Synot will each subscribe for another 5,05% of Atlas in 12 months’ time.
GPI CEO Alan Keet said the deal mad sense as two additional revenue streams would be created.
The first, he explained, was the ability to sell new gaming machines into the South African and African markets. The second is that GPI will obtain the contract to manufacture all the gambling machines for the African market in SA via Retreat-based joint venture Grand Tellumat Manufacturing.
AEEI subsidiary HST also seems likely to leverage other African opportunities from its roll out of LIMS services to multiple laboratories in Tanzania.
Khalid Abdulla, chairman of HST and CEO of AEEI, said the contract supported the company’s strategic drive to grow its footprint into Africa. “Due to our successful implementation of Hospital Information Systems and National Health Laboratory systems within South Africa, we are excited to start building our African footprint.”
He said the Tanzanian contracts were obtained in partnership with Maxcom Africa Limited, a technology company based in Dar es Salaam, Tanzania. Abdullah said AEEI was delighted at the prospects of now being able to deliver similar laboratory systems to Tanzanians and further into Africa.
Gerrit Henning, CEO of HST said the implementation project had already commenced and the solution should be operational during next month (October).
“The foundation is set for further expansions.”
He said the contract would advance the delivery of laboratory systems in Tanzania, assisting them with migrating away from current time-consuming paper-based environments. “This new system will allow them to provide a more effective turnaround time and efficient service to improve healthcare in the communities they serve.”