JOHANNESBURG: Specialist lender Kholo Capital has provided R275 million (about US$17 million) in mezzanine debt funding to DCC Holdings, the owner of one of South Africa’s longest-standing information and communications technology (ICT) distributors.
The money will be used to refinance DCC’s existing debt and to fund the company’s long-term growth plans, Kholo Capital said in a statement on Tuesday. The interest rate and repayment term were not disclosed.
DCC distributes personal computers, printers, enterprise infrastructure and software from global manufacturers including HP, Dell and Lenovo. It sells to a network of resellers, system integrators and retailers across Southern Africa.
Who DCC is
The company was founded in 1988 as Drive Control Corporation by Neil Rex, who ran it as managing director for more than three decades.
In 2018 it became Lenovo’s official distributor in Botswana, Namibia, Mozambique, Zambia and Zimbabwe, holding stock through its own branches in three of those countries. At the time it supplied about 400 reseller partners across the region, according to ITWeb Africa.
In 2022, Rex agreed to sell the business to a private equity consortium made up of Kleoss Capital, Fairstone Capital and Sciation, Channelwise reported. The company was renamed DCC Technologies in October 2023, with Carlos Ferreira as chief executive.
Kleoss Capital, a BEE private equity firm, remains a shareholder alongside DCC’s senior management.
“DCC’s shareholders, comprising senior management and Kleoss Capital, are pleased to introduce Kholo Capital into the capital structure of the DCC group,” Ferreira said.
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Picture: Supplied/Kholo Capital
“DCC has been growing steadily over the years with the addition of certain key brands and the expansion of our existing footprint within our established vendor relationships.”
What mezzanine debt is, and why it matters here
Mezzanine debt sits between a company’s senior bank loans and its shareholders’ equity. It carries more risk than a bank loan, so it costs more, but it does not require owners to give up shares in the business.
Kholo Capital says its loans usually run for four to seven years. Borrowers pay interest during the term and repay the capital in a single “bullet” payment at the end, which frees up cash in the meantime. The fund targets returns of more than 17%, combining interest with potential equity upside.
For a private equity-owned business like DCC, the structure allows the owners to rearrange the company’s debt without bringing in a new shareholder or diluting their stakes.
“This transaction demonstrates how structured mezzanine debt capital can be used to optimise a company’s capital structure, refinance existing debt and provide the financial flexibility required to support sustainable growth,” said Mokgome Mogoba, managing partner and co-founder of Kholo Capital.
Mogoba said DCC had “a strong market position underpinned by longstanding relationships with leading global technology manufacturers, an extensive reseller network and well-established logistics and distribution capabilities.”
A large ticket for the fund
Kholo Capital Mezzanine Debt Fund I reached its final close at R1.4 billion in February 2025, backed by South African institutional investors. Its founders, Mogoba and Zaheer Cassim, launched the firm in 2020.
The DCC deal is equal to roughly a fifth of the fund’s total commitments. It is also larger than the fund’s usual investment size, which Kholo Capital puts at between R70 million and R205 million per company. The firm says larger deals can be supported through co-investment by its limited partners or through syndication, but it did not say whether either was used in this case.
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Picture: Supplied/Kholo Capital
In May 2025, Kholo Capital and Maia Capital jointly provided R250 million in mezzanine funding to building products group Catapult, the owner of Everite, also to refinance debt and support growth.
When the fund closed, Cassim described mezzanine funding as “non-dilutive by nature”. The fund has said it aims to put more than half of its capital into Black-empowered companies and to create more than 500 new jobs.
The social impact case
Kholo Capital positions itself as an impact investor, and it pointed to DCC’s record beyond the balance sheet.
“Beyond its commercial strengths, DCC’s investment in youth employment, support for learners with disabilities and SME reseller development reflects a commitment to inclusive growth,” Cassim said. He added that DCC’s use of solar energy and water-saving measures showed “a practical approach to responsible business”.
The statement did not give figures for DCC’s youth employment or reseller development programmes.
Private markets keep moving
Hale Matsipa, managing partner of Kleoss Capital, part of the consortium that bought DCC in 2022, said the deal positioned the company for its next phase of growth.
“It also reflects the positive momentum in South Africa’s private markets and marks another successful collaboration between Kleoss Capital and a fellow private markets investor,” Matsipa said.
Deneys acted as legal counsel to Kholo Capital, while Webber Wentzel advised DCC.
