Loudfire concludes empowerment deal

Left to right: Bruce van Halderen, CEO of Loudfire and Kenny Setzin, CEO of Direng Entertainment, shake hands on the deal.

Loudfire now has an effective BEE shareholding of 30.15%, comprising 18.9% BEE shareholding via Direng and 11.25% via internal or staff ownership. In addition, the company has appointed three female shareholders to its board and ownership on an operational level is eight females and ten males.

The signing of the deal was concluded earlier today, with all the parties signing in both Johannesburg this morning and Cape Town later this afternoon.

Direng CEO, Kenny Setzin, who assumes a strategic role within Loudfire as chairman, comments: "It is Direng's stated objective to invest in portfolio companies that have the ability to deliver superior investment returns that are consistent with the risks involved and to also target companies that have a sustainable, competitive advantage with a track record, along with high calibre management and staff who want to be partners or increase their ownership level. It pleases me greatly to say that in Loudfire we have found a partner who fulfils all of these criteria and more."

Bruce van Halderen, CEO of Loudfire describes the process that brought the partners together: "Our search for an empowerment partner started with an appeal for investors to approach us, which we issued via a press release that was generously published by several important media. Prior to that, we had been hugely frustrated in our attempts to initiate the process. I said it then and it bears repeating, there is a lot of published dialogue regarding where you need to end up in BEE, but no practical guidelines to help you get there. Direng heard of our desire to partner with a BEE investor via this media appeal and I therefore want to thank the media for the critical role they played in this process."

Chemistry, value-add and economics aside, what clinched the deal for Loudfire, was the fact that Direng shares its values. The company made it clear from the outset that these values are the cornerstones of its business and sharing them was a non-negotiable criterion. They are: honesty and integrity; respect; kindness and generosity; responsibility and accountability; and ownership and commitment.

Adds van Halderen: "In reality, commitment to these values was far more important to us than whether our eventual BEE partner would be an institutional or operational partner, and even whether we would achieve our BEE status via sale or acquisition."

As regards the empowerment of internal operational partners, van Halderen says the selection process was a strategic one, rather than one of so-called entitlement. It was therefore led by strategic role selection and followed by qualitative personal selection. In the final process candidates were evaluated on their ability to add either strategic value to the business or superb tactical execution with the potential to become strategic players in the long term.

As a result, Loudfire has empowered 17 employees and one future employee with shares, of whom eight are female and the balance male. Moreover, three of these individuals have been appointed to the board. They are Natasha Creamer, Kirsten Schwikkard and Kamogelo Moiloa.

Concludes van Halderen: "Stronger and more powerful than ever, this new and invigorated Loudfire team is totally committed to remaining at the pinnacle of creativity and innovation in the events, parties and experiences arenas, and to making good on our promise of delivering 'Designer entertaining for your brand'."

About Loudfire

Loudfire South Africa is a mature, established business that has been operating for 12 years and is the sole Southern African licensee for the Loudfire brand. With offices in Johannesburg and Cape Town, as well as a satellite operation in Durban, the company has a wide footprint supporting its national reach, and is acknowledged as being one of this country's most innovative providers of upmarket corporate and private guest experiences.

Loudfire is unique among its competitors in that it is a full production company with extensive distribution capacity via its ownership of a fleet of operational vehicles, massive warehousing and storage capacity in all three cities, and the incredible scalability it offers via employment of more than 2000 highly skilled casual staff, all trained in Loudfire's in-house Academy. In addition to this, the company has a vast event asset base.

About Direng Entertainment (Pty) Ltd.

Direng's strength, in turn, lies primarily in its people and its shareholders are, without exception, highly regarded players in corporate South Africa. The company is 90% black-owned and was founded by Kenny Setzin, a past Executive Director of Nail, who sits on the board of Siemens and is Chairman of JWT South Africa and Ince.

Among the shareholders are: Maserame Mouyeme, marketing director of Coca Cola East Africa and former Group MD of FCB; Felicia Roman, radio and management consultant and non-executive director of Sunwest International, who is the former MD of Kfm Radio; and Victor Sekese, CEO of accounting firm SizweNtsaluba vsp Inc and chairman of the Black Firms Forum and the DaimlerChrysler BEE Trust.