Key BEE Groups acquire majority stake in Resolution

Two Black Economic Empowerment groups SADC Health and a broad-based Health Syndicate comprising Alder Berry and Faranani Health Solutions -- have joined forces to acquire a majority stake in Resolution, a privately owned company that is rapidly expanding from a healthcare base into financial services and related areas.

Resolution has been the driving force behind the development of Resolution Health into one of the country's fastest growing medical schemes, with more than 40,000 principal members and over 100,000 beneficiaries.

The move comes at a time when Resolution has indicated its intention to diversify into other areas, with the current CEO, Jannie Kotze, moving over to focus on these areas and the company's unfolding international interests. Executives Dr Duncan Laurenson and Bennie de Beer will continue to be closely involved in the running of the health division, with a yet-to-be-announced individual from the BEE investors to be appointed as health CEO.

SADC Health, which includes Vodacom Executive Romeo Kumalo, former Miss South Africa Basetsana Kumalo who chairs the Black Businesswomen's Association, and Murray & Roberts executive director Millard Arnold on its board of directors - is an investment holding company with interests in financial services, tourism and private equity.

Significantly, the Health Syndicate consists of a group of black investors with extensive experience in diverse areas of the healthcare sector and includes Faranani, South Africas biggest doctor's network, which has a core membership of about 950 doctors as well as contractual arrangements with various doctors groups. Adler Berry, a women-owned investment company, is constituted of women who are actively involved in healthcare.

Amongst other endeavors, Faranani is involved in designing and marketing medical cover products that open private healthcare access to low-income earners this is seen as the only route for growth in the South African medical aid industry. It is estimated that approximately 10 million employed South Africans do not currently belong to medical schemes.

Commenting on the deal, Resolution executive director Bennie de Beer said that apart from giving the company a high rating and a competitive edge in terms of BEE codes and requirements, it will also bring substantial financial services expertise to the organization which is looking to diversify into other areas.
"Transformation will play an important role in this deal as will the transfer of skills. The company will not simply be black-owned, it will be fully empowered in the true sense of the word," he said.

The new partners have indicated that they have chosen to invest in Resolution as it has established a solid platform and infrastructure for growth into other areas of service delivery. The transaction is subject to Competition Commission approval and certain suspensive conditions.

Meanwhile, signifying its intention to become a player in other markets, Resolution has announced the launch of two new products that will take the company into the financial services and insurance markets, as well as an in-house travel agency that will operate from the companys offices in Johannesburg.