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DN Invest, the Johannesburg investment group whose owners include Aspen Pharmacare chief executive Stephen Saad, will spend R2.1 billion ($130 million) acquiring stakes in four technology companies as it targets doubling in size within three years.
The purchases cover KnowRoaming, Mission Mobile, Frogfoot Networks and Vox Telecom, chief executive Ryan Noach told Bloomberg. They add to 25 businesses already in the portfolio and are intended to spread the group across the communications technology industry.
"There is more coming," Noach said.
DNI generates more than R12 billion ($744 million) in annual revenue and funds most of its deals from its own resources.
The fibre assets are already partly bought
The Frogfoot and Vox transactions were announced at the start of September. A DNI-led consortium subscribed for new shares in both, taking 34.8 percent between them in a deal valuing the two companies at R14.4 billion (about $893 million), with roughly $99 million going in.
Frogfoot and Vox are fibre and business connectivity operators, and the investment was framed around extending fibre into township markets.
Where the money comes from
Saad co-founded Aspen in Durban in 1997 with Gus Attridge and has run it since 1999. He holds 13.02 percent of the drugmaker, or 58,075,716 shares, worth about $546 million at the Sept. 4 close.
Mike Teke founded Seriti Resources, the coal producer that acquired South32's South African thermal coal assets and supplies a substantial share of Eskom's fuel, and runs Masimong Group Holdings.
Both appear in the DNI shareholder register set out in the annual reports of Sabvest Capital, the Johannesburg-listed investment company that is DNI's largest outside holder. The register also includes Peter Gain, the Mineworkers Investment Company, RMB Family Office Group Solutions and Dionne Ellerine, of the family behind the Ellerines furniture chain.
The offshore split
DNI draws about 85 percent of revenue from South Africa but operates in more than 35 countries including other African markets, Brazil, Pakistan and Australia. Its digital ecosystems cluster, the non-distribution technology businesses, generates about 65 percent of its earnings outside South Africa.
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