The making of an SA tech giant
When the 20-something Asher Bohbot decided to come to South Africa for a two-week holiday in 1980, he had no idea how the trip would end up changing his life.
Back then, Bohbot – who was born in Morocco but grew up in Israel – had recently graduated with a degree in chemical engineering from Ben-Gurion University.
With his life still ahead of him, Bohbot was up for an adventure so, when a friend invited him on a holiday to SA, he was keen to go. In the end his friend could not make the trip but, since Bohbot’s ticket was already booked, he thought he might as well go through with the trip.
While he enjoyed his holiday, it was a chance meeting on a bus in Johannesburg that prompted him to immigrate to SA.
On said bus, Bohbot met a friend from Israel who invited him to a party, where he then became aquainted with someone who was looking for a chemical engineer to work at his company. Thinking he had nothing to lose by taking the job, Bohbot received permission from his employer back in Israel to be absent from work for six months.
Six months turned into a year...and then, as Bohbot puts it, “life happened”.
This life he speaks of saw him settling down in South Africa. He married, had children and eventually grandchildren. And along the way, he had a stellar business career.
After an initial stint at chemicals group AECI, he ended up taking a job at Laminate Industries, which was eventually bought by PG Bison in 1993. During this period, Bohbot rose through the ranks and eventually headed up PG Bison’s logistics & IT division.
The birth of EOH
After close to 15 years with the group, he could easily have stayed on at PG Bison. But in 1995, just after SA had become a democracy, he decided to leave the safety of the corporate world and started his own IT businesses, Enterprise Outsourcing Holdings (later to be known simply as EOH).
At the time, the business sector was beginning to understand the importance of IT but did not have the skills to make the best use of it. By outsourcing the handling of their IT to EOH, companies could leverage technology without hiring additional staff.
Bohbot managed to get off to a solid start. He talked PG Bison into being the first customer and put together a staff contingent of about 20 people.
A consistent performer
Over the years, EOH gained an impressive reputation but somehow always managed to stay under the radar.
While other local IT companies like Gijima and Dimension Data were making headlines (sometimes for the wrong reasons) EOH, with Bohbot at its helm, just kept ticking along without any fuss.
Its solid but unspectacular performance even saw it dubbed a “boringly consistent performer” by one commentator.
This started to change in about 2009, when the investment community started to wake up to it. It was trading at around R5.30/share in March of that year but by September it had risen to R7.70/share.
The group moved into the big leagues when its revenue for that year breached R1bn for the first time, bringing in R1.2bn for the 12 months to end July. This growth is even more impressive considering it had increased the topline number for the fifth consecutive year.
It increased headline earnings per share (HEPS) from 30.7c in 2003 to 120.7c in 2009.
Shareholders had no reason to complain as dividend payments were increased from 7c/share to 30c/share over that period.
Despite the sluggish economy, the group has showed no signs of slowing down. Annual revenue is now at R9.73bn – up 41.9% from the previous year – for the 2015 period, after tax profit was at R692m and HEPS stood at 575c. It also increased its dividend with 25% to R1.50 a share.
With such success, it is not surprising that its share price is R128, which is a 700% rise over the past five years.
EOH has clearly done well and is attracting a lot of attention, but Bohbot is not looking for anyone to pat them on the back. He says it is nice to get attention but he is more concerned about EOH’s performance than getting acknowledgement for it. “Nothing has changed but the size of the group.”
This ‘keep your eyes on the road’ management approach of Bohbot has become part the culture of the group. “We don’t have big egos.”
EOH has come a long way under Bohbot’s leadership and is today SA’s largest IT company. He says one of the main reasons it has managed to get this big is that he had experience in running large organisations before he started his own company.
A fledgling business with an inexperienced leader could achieve a degree of success but there would eventually come a time when the business owner would be overwhelmed and the company would just stop growing.
Bohbot was lucky because he had a clear understanding of the transitions his business would go through and knew what needed to be done to lead his staff through them. “That experience counts.”
It’s clear Bohbot takes his role seriously. He notes that proper management of the staff – he gives them the authority to do their jobs – has been one of the main reasons EOH has been successful. “The game of business is the game of people.”
EOH focuses on bringing the best out of its people, which is one of the characteristics that differentiates it from other IT companies.
Where other tech businesses concentrate on plugging products, he says EOH focuses on getting people to use the technology to solve problems. “Technology makes it possible and people make it happen.”
This ties in with of EOH’s main goals which he sees as a vehicle to transform SA and develop content will address local issues. “Our purpose is to look at the needs of society. Not to look at products and try to sell them.”
For someone who has taken a roundabout way to get to SA, he does not see himself as an outsider looking in. “I have been here 34 years. I don’t see myself as an immigrant.”
This article originally appeared in the 11 February 2016 edition of finweek. Buy and download the magazine here.