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Media Release: Kirsh initiates strategy behind purchase of Foneworx shares.
FONEWORX HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1997/010640/06)
Share code: FWX ISIN: ZAE000086237
(“FoneWorx”)
MEDIA RELEASE: KIRSH INITIATES STRATEGY BEHIND PURCHASE OF FONEWORX SHARES
FoneWorx, a Telecoms and IT solutions provider, today announced that the purchase of the shares owned
by the Issie and William Kirsh Family Trusts (Kirsh Family) has been completed. The Kirsh Family is now the
largest shareholder in Foneworx with a 32.8% stake.
The transaction received 100% shareholder support.
Commenting on this development, Mark Smith, CEO of FoneWorx said “We are very pleased that our
shareholders supported this strategic transaction. As alluded to in prior announcements, this was always
intended to be the first phase in a broader strategic initiative with the Kirsh Family, and we are now in a
strong position to make this a reality.”
William Kirsh said “We are very happy with the progress made, and I am also extremely pleased that the
new company that I have started, and in which my father has partnered me, Value+ Nettwork (Value+), can
now move towards merging with FoneWorx, that is intended to be mutually beneficial for both companies.”
Since resigning as CEO of Primedia in August 2009, William Kirsh has spent two and half years developing
and refining the strategic blueprint for Value+, as well as commencing a series of acquisitions in line with this
blueprint.
Value+ is a one of a kind in South Africa. It is dynamic and straddles a number of sectors that are growing,
including the data and analytics market, rewards and benefits sectors: Value+ refers to this as “VALUE” and
has developed a proprietary system and definition to maximise the opportunities from this sector - and
technology enhanced digital delivery platforms. It also has both horizontal and vertical integration
characteristics to it, which leads to lots of opportunities for synergy.
Kirsh’s approach since inception has been to develop a vision which is unique and achievable and where
companies can benefit synergistically from being part of the group. He has also focused on identifying
market sectors that are growing, are big and fragmented. (A similar approach led him to establish Primedia in
1993.)
William Kirsh said “Developing the strategic blueprint for Value+ has been challenging and has required an
extraordinary amount of research and fact finding. However, I am extremely pleased with the final product,
which embraces and anticipates key future needs for both corporates and consumers.”
“As the business model is technology and intellectual property driven, it is very scalable. The operating
leverage is therefore high, with good operating margins and quality free cash flow generation characteristics
–common to that of FoneWorx,” added Kirsh.
In conclusion, Mark Smith said: “FoneWorx has been actively looking for new growth opportunities and the
proposed merger with Value + is considered a great strategic fit for us. William has a long and successful
track record in consolidating industries, and the strength of the combined experience of the two companies
management teams, augurs well for a good partnership.”
The merger terms for the two companies and additional information on the Value+ strategy and its
businesses are expected to be announced towards the end of November.
Johannesburg
25 September 2012
Designated Adviser
Merchantec Capital
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