Sugar-coated exit

Johannesburg, 23 August 2004 - Private-equity player Treacle Venture Partners has sold its 25,3% stake in one of two listed investments, ERP.com, to a black economic empowerment investor (BEE).

Although the BEE shareholder, Blitec is getting the shares at a discount to the current market price – 98c a share, compared to a closing price of 116c on Monday, it is still a very lucrative deal for Treacle.

Partner Rudolf Pretorius said Treacle had made a profit of about R35m over the three years of the life of its investment in ERP.com.

Treacle announced earlier this year that it would no longer focus only on the technology sector, but would start a new fund with a broader investment mandate.

Pretorius said that as a result of this new focus, Treacle would gradually be winding down the first fund and as a result had to investigate opportunities that arose. He said that in the private-equity game, it was not just about making investments, but about knowing when to take a profit.

ERP.com had been negotiating with Blitec for about nine months, Pretorius said. But, it made little sense to issue new shares, so the company had looked at its existing shareholders for a possible block of shares.

Blitec is an investment company formed in 1997 by the Black Information Technology Forum, which also has a 30% stake in the public sector SAP solutions provider SAP Public Services.