Lawyer Monthly Magazine - May 2019 Edition

90 Transactions www. lawyer-monthly .com MAY 2019 ADVISER INTERVIEW Parag Shah - Partner Vivek Patel - Director Grant Thornton Please tell me about your involvement in the deal? We assisted our client, Enko Capital to carry out a financial and tax due diligence of Software Technologies Ltd (the target) to assist them make an informed decision on their proposed investment. This involved reviewing the historical and forecasted financial data, as well as the tax position of the target and advising them on any concerns or exposures that we found in our review. Why is this a good deal for all involved? This was a good deal for both the parties as both, the target company and our client got what they wanted. The target company has been growing at a good rate and were looking to accelerate their growth by expanding their service offerings to different markets. They needed some financial injection to assist them with this strategy. On the other hand, our client had the opportunity to close their first investment in Kenya and the fact that the target company was already performing well, made it a great investment for our client. Both parties also agreed on the valuation adjustments and so neither party closed the transaction with any grievances. What challenges arose? How did you navigate them? As the target company is primarily involved in the development and provision of software solutions, our biggest challenge was on the treatment and reporting of the intangible assets in the financials of the target as there are various assumptions to be used for the same. However, our broad understanding of IFRS and being part of a global network assisted us to navigate this challenge and compare the treatment of intangible assets to similar businesses across the world which assisted us to validate our recommendations on the same. Transaction Report EAPEF Invests in Software Technologies Limited, Kenya Enko Capital Managers (“ECM”), managers of the Enko Africa Private Equity Fund (“EAPEF”), a private equity investor targeting mid-cap growth companies across Africa, has completed an investment to provide expansion capital to Software Technologies Limited (“STL”), a Kenyan-headquartered Group proprietary software solutions provider and IT training company. The deal marks the seventh investment for EAPEF and will support STL’s expansion strategy into selected African territories as well as growth in its home market of Kenya. Specifically, the investment will be used to provide funding to roll out its existing suite of software products into other African markets, as well as to expand the outreach of the Institute of Software Technologies (“IST”), its training subsidiary. This announcement appears as a matter of record only EAPEF Invests in Software Technologies Limited, Kenya Legal advisers to EAPEF: