Ethos Leads Investment Into Niche Software Company, CQS
Investment focuses on growth and facilitates black empowerment transaction with Kapela Investments
Ethos Private Equity (“Ethos”) is pleased to announce its investment in CQS Technology Holdings (“CQS”), a specialist financial software company.
The investment facilitates the introduction of a 25% shareholding by empowerment group, Kapela Investments Holdings (“Kapela”). Ethos and CQS management hold the remaining shareholding. CQS was established in the early nineties by Ashley Cohen and Rosh Segal.
It is one of South Africa’s leading software houses specialising in the design, development and deployment of software solutions for audit, risk management, financial reporting and corporate performance management.
CQS, a highly differentiated distributor, has a large, blue chip client base whose customers range from audit and financial professionals to listed companies and government bodies. The CQS client footprint extends up into Africa and includes Kenya, Nigeria, Namibia, Botswana, Malawi, Tanzania, Zambia and Uganda. CQS’s solutions include CaseWare® - a leading supplier of software solutions to accountants and auditors worldwide and ACL®, the leading global provider of data analytics and continuous monitoring software.
The transaction with Ethos and Kapela is intended to help take the already-successful company to the next level in its development, by growing its operations into new products and markets, seeking out value enhancing acquisitions and alliances, bringing additional strategic and operational support to management and incorporating best practice in governance and corporate processes.
Kapela invests in mid-cap businesses with high growth potential in sustainable industries and with strong management teams. Kapela is chaired by Israel Skosana, former Executive Director of Absa Bank.
Stuart MacKenzie, Ethos Partner said: “CQS is an exciting, final investment, for the Ethos Technology Fund. They have established themselves as leaders in their market and we are delighted to have the opportunity to partner with them on the next stage of their growth plans. The facilitation of BEE in this transaction was an important factor in executing the transaction and our assessment of future growth opportunities.”
Ethos Principal, Samantha Pokroy Bossenger added “The market for financial integrity, risk management and compliance products is growing significantly – both in South Africa and globally - and we look forward to building the company around this core competence.”
Ashley Cohen, Managing Director of CQS said: “We welcome both Ethos and Kapela to our business. Ethos will be an important partner for us in helping to forge new business relations and opportunities and helping to manage our growth successfully. We look forward to drawing on their well known expertise in the South African private equity market and their experience in adding value to founder managed businesses. The Kapela team also brings significant added value on an internal strategic platform, unleashing business and networking opportunities as well as being a good cultural fit.
Israel Skosana, Chairman of Kapela said: “As a hands-on investment team, we look for investments where we are able to make a meaningful long-term contribution in businesses with high growth potential in sustainable industries. The CQS combination of a strong management team, world class products and solutions differentiates them in the market place. We look forward to nurturing our relationship with them to enhance the company’s future potential.”