ISA raises $3.7 million from Dataproof stake sale

Information Security Architects (ISA) Holdings Limited, a South African-based investment holding company specializing in comprehensive network, internet, and information security solutions, primarily operating within sub-Saharan Africa, has sold its 50% stake in cybersecurity firm Dataproof Communications for R62 million ($3.7 million), marking a strategic portfolio shift.

The transaction, executed through its subsidiary Information Security Architects, will see Dataproof repurchase the 50% shares as part of a structured buyback arrangement, enabling ISA to unlock value while advancing its empowerment strategy and refocusing on core operations.

Deal structure and funding terms

The R62 million ($3.7 million) transaction will be settled through a mixed payment structure, with R52 million ($3.12 million) payable upfront and the remaining R10 million ($600,722) deferred over 12 months, accruing interest at Investec Bank’s prime lending rate.

The deferred portion is secured through a cession of Dataproof’s trade receivables, alongside financial restrictions designed to ensure repayment capacity, including limits on dividends, related-party payments, and non-core capital expenditures. ISA’s exit hands full control to co-director Thapeli Matsabu, positioning the company for independent growth.

Financial performance snapshot

Dataproof reported net assets of R51.66 million ($3.1 million) and profit after tax of R12.3 million ($739,063) for the year ended February 2025, according to audited financial statements prepared under International Financial Reporting Standards. For the six months to August 2025, unaudited net assets rose to R59.3 million ($3.56 million), with profit after tax of R7.7 million ($462,583).

Governance and regulatory oversight

The deal qualifies as a related-party transaction due to board overlap involving ISA’s financial director. Independent directors deemed the transaction fair and reasonable, with full recusal observed.

While shareholder approval is not typically required, ISA has scheduled a vote due to broader regulatory considerations tied to potential takeover activity.

Investor backing amid cybersecurity-driven divestment

Founded in 2014, Dataproof provides cybersecurity solutions that help organizations prevent, detect, and respond to digital threats. The company operates in a rapidly growing sector driven by rising cyber risks across Africa.

ISA has secured support from shareholders representing 65% of voting rights, signaling strong confidence in the transaction. The disposal reflects a broader strategic repositioning as ISA streamlines operations, unlocks capital, and aligns with empowerment objectives.