Turnkey telecommunications company Ikwezi Group has taken a majority stake in IT group Fintech's subsidiary Intergraph Systems for an undisclosed sum. The deal represents the first full black economic empowerment equity initiative for Fintech, an Altron Group operating division.

Intergraph Systems operates two graphical information systems resellers, Intergraph and Bentley, as well as an Internet service provider, Internet By Intergraph (IBI).

Announcing the deal, Ikwezi CEO Thozamile Botha said under Ikwezi the three divisions would be repositioned as separate companies, with Ikwezi holding the majority stake in each and Fintech a minority share in the Internet and Intergraph businesses.

"Our own IT infrastructure company, WorldCom, has been doing a little bit of geographical information systems (GIS) work, digitising maps that are used to plan telecom networks. We have purchased Intergraph products and have recognised the importance to the customer base of both Intergraph and Bentley. Both companies offer a wide range of computer aided engineering software solutions. Intergraph NT workstations are also used widely by Intergraph's customer base. What makes the joint venture with Fintech logical is that Intergraph Systems' customer base complements our own customer base. Telkom, Eskom, the mines and others are customers of both companies. We saw a lot of downstream opportunities from the work Ikwezi gets involved in for those companies and vice versa as well."

According to Botha, Ikwezi Business Solutions, a unit of Ikwezi's IT division, will use IBI as a platform for its expansion into IT infrastructure such as value added data networks and electronic commerce. "We wanted to get into providing Internet service, but it is an expensive business to get into in terms of the infrastructure and getting the right people with the right experience into place. IBI has already gone through that, it has a good customer base and they have a strong customer support from companies in the Altron group. They are growing their services and are focused on the corporate market, which is our own target market."

Intergraph Systems MD Rex van Olst says the Fintech and Altron group companies will continue to outsource their Internet and intranet business to Intergraph Systems. He says this deal emphasises Fintech and Intergraph Systems management's desire to share its products and services with empowerment partners thereby helping to build our nation through partnerships within previously disadvantaged communities. "It has been the company's vision these past four years", says van Olst, "to form a specialist IT company in South Africa that, in addition to its principles, Intergraph and Bentley, owning a stake, a black empowerment company also owns a significant stake. This is the best formula for success during and after transformation as it offers the customer the best of all worlds. With Ikwezi, Fintech and the international principles behind the new companies, the future looks extremely good, despite the challenging current economic situation in southern Africa".

Botha says the Intergraph Systems acquisition is a reflection of Ikwezi's growth strategy. Intertech's international principles, Intergraph and Bentley, will be offered minor stakes in their respective companies. "Subject to approval, Intergraph will be known as Intergraph Systems Southern Africa, and IBI will be known as Internet by Ikwezi. Bentech Graphics will continue to operate as a reseller. This may change when negotiations with Bentley have been concluded.

"Up until now the whole group has grown organically from companies we or our shareholders have set up, so, although we are busy with similar deals, this represents our initial growth by acquisition," he said. The Ikwezi Group was formed with the vision of becoming a formidable force in the telecommunications and information technology industry. This group provides value-added services throughout the SADC region. The group has grown organically and by the acquisition of companies that are dedicated and focused on their niche markets within their industries. The business and skills of these companies complement each other, creating a whole, which is many times greater than the sum of its parts. The Ikwezi group is committed to empowering people from previously disadvantaged communities, by reserving an 80% shareholding for black economic empowerment and similar groups. The boards of the companies as well as the make-up of the employees will also reflect this commitment. All people within the company will be selected for their dedication and their ability to contribute to realising the vision of the group.

Throughout the Ikwezi group, a culture of total dedication to providing the highest levels of service to customers is paramount, with every person taking responsibility for their contributions, thereby creating an environment of total quality management. The vision of the group will be communicated to all employees so that jointly as a team, the staff will not lose sight of the goals that will successfully take the Ikwezi Group well into the next millennium.

Intergraph Systems Southern Africa

(011) 313 1222

rvolst@intch.co.za