FOCUS-Didata<DDTJ.J> makes giant step into Europe
By Luke Baker
JOHANNESBURG, Nov 16 (Reuters) - Dimension Data, South
Africa's largest IT group, said on Tuesday it would pay 8.12
billion rand ($1.3 billion) for rival Comparex's <CPXJ.J>
European networking operations, creating a global powerhouse.
The deal, financed via the issue of 290 million new Didata
shares at 28 rand each, will create the world's largest
independent network services company with operations in 35
countries on four continents and turnover of 10 billion rand.
"This deal is about pursuing global leadership in network
services," Didata Chairman Jeremy Ord told a news briefing.
"Our target market is now the global multinationals -- the
Deutsche Banks and Citibanks -- who need their networks
maintained 24 hours a day, seven days a week, 365 days a year."
Didata, whose shares closed 125 cents higher at 34.30 rand
following weeks of anticipation about a deal, said the
acquisition would give it about 20 percent of the pan-European
network services market, adding to its 20 percent market share
in Asia, 25 percent in Australia and 40 percent in South Africa.
Comparex has operations in Germany, France, Italy, Sweden,
Switzerland, the UK and Ireland, Spain, Austria and Benelux.
Didata already has operations in the UK, Australia and a
listed subsidiary, Datacraft <DCFT.SI>, operating in Asia.
"We're still short of North America and that's obviously our
next target," Ord said. The United States and Canada account for
just over 50 percent of global networking operations.
Ord said Didata, which will have a market capitalisation of
about 34 billion rand on completion of the transaction, would
issue another cautionary on Wednesday and would likely make an
announcement about a U.S. deal "soon."
Nedcor Bank <NEDJ.J>, which holds 25.1 percent of Didata's
global businesses, will take a 20.1 percent stake in Comparex
Networks in exchange for 1.1 billion rand and a reduction in its
Didata international holding to 20.1 percent, Didata said.
Comparex, South Africa's second-largest IT company by market
capitalisation, said the deal was beneficial because it gave it
a healthy stake in a company that was going places.
"We see ourselves participating in something truly global,
something truly leading," said Executive Director Rian du
Plessis. Comparex shares ended down 0.85 percent at 41 rand.
The transaction represents a mega step in Didata's plans for
globalisation, a process it hopes to reinforce with an offshore
listing sometime by the end of June next year.
The company has applied to the ministry of finance for
permission for a foreign listing, which would give it access to
needed international capital, but has yet to receive approval.
If approval was not granted soon, Didata said it planned to
apply for a second primary listing of its international
operations, probably on the London Stock Exchange, while
maintaining its South African primary listing.
"We will be listing offshore by the middle of next year no
question. By hook or by crook we will do it," Ord said.
The acquisition of Comparex's European operations also draws
Didata tighter to much bigger international partner Cisco
Systems <CSCO.O>.
Cisco is a major supplier of networking equipment and trains
highly specialist network engineers, many of whom work for
Comparex and will now join Didata.
Ord did not rule out even closer cooperation with Cisco in
the future but did not elaborate. Some analysts have suggested
that Cisco could take an equity stake of as much as 20 percent
in Didata.
"Cisco and ourselves have a good relationship. It would be
desirable for us to be even closer, but I can't say how that
might happen," he said.
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