Lightedge has completed a black economic empowerment deal with the Red Magic consortium, which now owns 40% of the national IT solutions and services company.
Red Magic started as a consultancy company, specialising in the facilitation of business deals between partners from different cultures in South Africa in particular, and the African continent in general. The company’s operations included interests in mining, aquaculture and information and communications technology. Over time, the company’s composition in terms of its partners has led to it developing strongly in the IT sector.
Grant Poulton, managing director of Lightedge says, “We have been looking for a BEE partner for over five years. In this time we have interacted with over 30 prospective consortia, individuals and companies but with no success. We met Red Magic some time ago and the team of people behind the consortium has consistently demonstrated their seriousness about actively contributing to the success of Lightedge.
"They are clearly dedicated to growing Lightedge and see the opportunities that a partnership will provide. This commitment to growth mirrors that within the current management team. I believe that together, Lightedge and Red Magic will be a force to be reckoned with.”
This is Red Magic’s first technology acquisition. Obbey Mabena, spokesman for Red Magic, says: “We were looking to partner with a company with access to good technology and skills that was large enough to offer us a national footprint, but independent enough so that the deal could be based on business rationales such as long term growth potential and not pure shareholder sentiment.
"Lightedge presented a one-of-a-kind opportunity in this way. Our meeting with Lightedge was a culmination of a long search driven by our commitment to getting into a partnership based on the widest possible convergence of visions to contribute to the development of the ICT industry in South Africa.”
Poulton adds: “Lightedge’s commitment to BEE will not end with this equity deal. The management, which now includes representatives of Red Magic, is looking at initiatives to benefit our staff and communities beyond the shareholders.
"This ideal can only be realised through robustly building the business to such an extent that we would be among the top players in the industry, not only in South Africa, but on the continent as a whole and thus in the world.”