A healthy B-BEEE Deal For Compass Medical Waste Services
The transaction, which saw the company sell a 25.1% stake to Gap SPV 2 (Pty) Ltd., a black controlled entity managed by equity firm, Gap Capital, will generate income to fund non-profit organisations that fall under its philanthropic arm, the Light Trust.
These include Grace Aid, iThemba Projects and The Domino Foundation (including the Red Light Programme). All focus on empowerment through education, enterprise development and humanitarian work.
Gap Capital’s investment criteria involves selecting businesses with sound track records and consistent earnings as well as strong and ethical management.
“Applying proven investment strategies, we generate financial and social returns for our investors whilst, at the same time, addressing inequalities in a sustainable manner. Central to our investment philosophy is identifying great businesses who understand their markets, invest in their people and have the ability to deliver quality earnings and sustainable growth,” says Alan Beesley, director of Gap Capital.
Established in 1998, Compass Medical Waste Services delivers a compliant healthcare risk waste (HCRW) management service by providing their customers with the best possible solution for HCRW containment, transportation, treatment and disposal, at the same time, continuously identifying opportunities to improve processes and reduce the impact of waste on the environment.
Compass is active within both the public and private healthcare sectors and operates in Gauteng, KwaZulu-Natal, the Eastern Cape, Limpopo, Mpumalanga, Free State, Northern Cape and the North West servicing large hospitals, clinics, doctor’s surgeries, pathology laboratories and related facilities.
Following the conclusion of this transaction, Compass’ B-BBEE status has improved from a level 7 to a level of 5. A strategy has been developed to reduce this to level 4 and lower within three years.
Ian du Randt, managing director of Compass Medical Waste Services, said that this carefully concluded transaction was far more than a means to an end. The company had taken more than seven years to find the right B-BBEE partner.
“Our search took time because we were determined to partner with an organisation whose values and work ethic mirrored our own. We found a partner with a passion for assisting successful businesses to grow, as well as a desire to leave a legacy through the provision of a sustainable philanthropic solution,” he explained.
Karabo Mokoape, one of the Trustees of the Light Trust, commended Compass for being willing to take a long term and more sincere approach to B-BBEE for both its own benefit and that of others.
“I think that we have made fundamental mistakes when it comes to B-BBEE. We haven’t fulfilled what was envisaged in the legislation. B-BBEE has been abused as a means of fulfilling the letter of the law and not the spirit of the law. Just a small number of people have benefitted from the application of this legislation. I believe that we have to find a way to bring more people along on a journey to success and financial independence,” he said.
Du Randt said that Compass’s strategy to improve its B-BBEE rating to lower than 4 over the next three years entailed change across each of the scorecard categories.
“In the medium to long term, our goal is to continue to improve the sub elements within the ownership category which we believe is strategic to the overall management, growth and focus of the business,” he said.
He said that Compass embraced an employment equity policy that will ensure a fully representative management that is skilled and well trained to provide the calibre of service required.
“In 2016 we embarked on a major drive to enhance the skills development of staff. Considerable funds have been set aside and spent on this initiative. We are also in the advanced stages of formulating a learnership programme,” du Randt said.
“When it comes to preferential procurement, we are maintaining and growing our existing database with more B-BBEE accredited suppliers. At the same time, we are assisting our suppliers to ensure that they, too, maintain or become B-BBEE compliant. Enterprise development is also a priority and we have invested in our major suppliers and signed service level agreements for the provision of tracking systems and process. We will continually strive to identify and engage with entrepreneurs and companies who coincide with our goals and ambitions,” he added.