EOH sells 70 percent of construction software business
The deal is worth R444.4 million.
South Africa-based technology group EOH has sold 70 percent of its Construction Computer Software (CCS) business to RIB Software for R444.4 million, which is as part of a strategic partnership agreement with the German buyer.
“The transaction is in line with EOH’s investment strategy to assist its intellectual property and software-based businesses to expand internationally,” the company said.
EOH said it would use the cash proceeds mainly to reduce debt.
EOH management recently stated that it would unlock R1 billion in cash through strategic partnerships and targeted disposals in order to reduce the company’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 company said.
The company, which previously said it was planning asset sales, said it had also entered into a put-and-call-option agreement to sell the remaining 30 percent of CCS to RIB in December 2022.
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. RIB is operational in almost 30 countries, has more than half a million licensees and is focused on growing that number to two million over the next two years.
EOH said CCS’ access to RIB’s broad development network, international business analysts and development teams, will “greatly enhance CCS’ growth strategy. RIB provides software to the construction and property industries.”
“RIB is specifically focused on the construction vertical and intimately understands what the clients in this sector want and as such represents a natural fit for CCS,” EOH said.
This deal was “a significant milestone” in EOH’s strategy to align with partners that could help it scale up certain of its “unique software businesses”.
“It is a crucial step forward for EOH’s intellectual property division and RIB is the right partner to unlock CCS’s full potential, enabling both future growth and internationalisation.”
EOH is under a new management team that is led by CEO Stephen van Coller (pictured) and chair Xolani Mkhwanazi.