MB Technologies has found a new BEE partner, Royal Bafokeng Finance. MB chairman and CEO Leo Baxter is upbeat about the opportunities for the company he founded 20 years ago. LEO BAXTER, CEO and chairman of MB Technologies, is ready to embrace real black economic change to make another stab at scaling great heights.

MB, a first tier supplier of IT products, has a history some 20 years old. This time has seen some glory before, but has not been completely without challenges, as was clear when it delisted after the Internet bubble burst in SA.

The group today includes distribution players like Tarsus, ACT and Storgate. At the height of its headline-making days, MBT was the biggest IT company to list on the Johannesburg Stock Exchange.

Today, its strategic investors include E Oppenheimer & Son, as well as Barclays, a private equity investor and the partner that has seen the company through leaner times.

Today, Baxter has fresh enthusiasm when he talks about his company and what made it good in the first place. He believes it has now consolidated its position as a leading distributor. In former years, it also had Internet and software and services interests. Today, it makes most of its money from IT distribution.

IN WITH THE NEW

Black empowerment is what Baxter hopes will provide new impetus. Baxter says he believes the company must give back to the previously disadvantaged and embrace black economic transformation.

When Royal Bafokeng Finance (RBF) and MB Technologies announced their deal during the break, it was stated that the transaction would be concluded within six weeks, and sees. RBF takes a 26% stake in MB Technologies Group.

The BEE deal, Baxter says, was the result of two years of actively searching for a partner that suited the company`s vision. Now that it is finalised, the real work starts.

The deal between the two companies will come into effect through a `proportional dilution` of the current shareholding of MB Technologies, and payment for the RBF shares will take place in cash.

GOT BURNT

Baxter says he has learnt some valuable lessons from other "so-called" BEE deals.

"We have seen quite a few significant and spectacular failures in that arena. In the past we have done a couple of deals at subsidiary level, and had less than a wonderful experience. Often [prospective partners] are not reading from the same page."

Moving on, he says to do the RBF deal at holding company level, MBT has had to reverse some of its previous transactions.

Baxter says MB now has a partner with significant focus on the upliftment of people beyond just their own staff. "RBF is a real partner with real objectives. One of the reasons they chose to partner with us was because the advancement of South Africa requires access to affordable technology which ties into modern education," he says.

GEARED FOR GROWTH

With MB Technology a major supplier of technology in South Africa, Baxter says the companies can together address people advancement in a far less excitable market.

"MB Technologies has always been positioned as a first-tier technology provider, courting large organisations with [its] top American brands. [But] today, the company is taking a different approach to grow second- and third tier markets.

"We believe [we will have success with] new market opportunities, which is more consistent with emerging market trends globally," he says.

Ultimately, Baxter believes a company reaps what it sows. If you had the choice of giving away 25% of your wealth, or alternatively risk to lose everything, what would you choose? And if you stood to gain growth and get a full recovery from the latter, would you still hesitate?