Former National Prosecuting Authority boss turned businessman Bulelani Ngcuka’s investment company Amabubesi will buy a 20% stake in popular small cap IT company Pinnacle by subscribing for nearly 37,3m shares at 100c each.

Pinnacle CEO Arnold Fourie said it had spent two and a half years looking for the “right” black economic empowerment (BEE) partner and had been very impressed by the “professional” way Amabubesi conducted its business.

He says Pinnacle should be able to tap into the other companies that Amabubesi is invested in. Fourie also likes the fact that Amabubesi won’t be “merely an investor”, and has allocated resources to work with Pinnacle at an operational level. It also has the right to appoint two non-executive directors.

Pinnacle assembles and distributes the Proline brand of PCs, mostly via wholesale distribution. It also has a software and storage business segment.

Fourie said the transaction was a “straight business deal”. The parties had started negotiating in June, when the share price was below 80c, and had done the deal at 100c a share after the price had appreciated.

Pinnacle shares closed unchanged at 145c yesterday.

Amabubesi’s other directors include Sango Ntsaluba, Thabiso Tlelai and Peter Moyo. Its investments range from stakes in listed companies Growth Point and Basil Read to holdings in numerous unlisted companies including Stallion Holdings, Medipost Pharmacy, Bayview Hospital and Consolidated African Technologies, among others.

Fourie said Pinnacle had refused to sell more than 20% of the company to a BEE shareholder. This was so it could facilitate the introduction of employee groups and other broad-based BEE shareholders, up to another near 15% shareholding.

But, Amabubesi will have the first right of refusal to take up more Pinnacle shares if the company needs to issue more shares for cash. Fourie said in this case, there would be no discount or any strings attached.