Private Equity fund ups Sandbox stake

International private equity company Aureos Capital has paid R66 million to increase its stake in Sandbox.

The deal will see Aureos Capital increase its existing 10% stake to 39% and Sandbox management gaining 20% in the technology service provider. The transaction was funded through the $254 million Aureos Africa Fund and the $50 million Aureos Southern Africa Fund.

In 2008, the Aureos Southern African Fund bought 10% of Sandbox from the founding shareholders. Aureos simultaneously funded a 21% empowerment stake in Sandbox.

“We believe that Africa has fantastic and exciting growth potential, despite the downturn in global markets,” says Ron den Besten, managing partner of Aureos SA.

Sandbox was founded in 1998 and is now present in SA, the Middle East and the UK. It is focused on the intellectual property required for skills and services for large-scale enterprise resource planning, customer relationship management, enterprise compliance, enterprise intelligent building management and integration, mission-critical high-definition large-scale electronic and video surveillance, enterprise security and allied enterprise active audio visual systems.

Den Besten adds that “the products and offerings of Sandbox are in demand in many emerging markets and we are confident that growth companies in Africa will benefit from the strategic value of Sandbox’s suite of technology solutions. With Aureos’ networks throughout Africa and the emerging markets, we will be able to add significant value to the business.”

The management buyout (MBO) team comprises 15 senior company executives. The transfer of shares to management bolsters the existing 20% management shareholding largely held by Paul Wootten, a Sandbox founding shareholder and current CEO.

Wootten says the MBO is part of the company’s strategy to grow the organisation. “It is imperative senior management and, ultimately, all staff share in the financial performance they are called upon to deliver.”

He points out that having Aureos as an anchor investor supports Sandbox’s ability to grow in SA and throughout the African continent and beyond. “There is a mutually agreed five-year strategy and commitments from both teams on issues such as strategic intent, tactical execution, growth and market potential.”

Sandbox’s current strategy is to boost its existing organic operations with strategic and complementary acquisitions, leveraging its current turnover base of R350 million.

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Private Equity fund ups Sandbox stake

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