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Didata takes TCO in R345m IT dea... Transnet retrenchments loom after R100m ... Transtel ditches Johnnic, MTN ... Motor industry jammed in slow lan... Nedcor still making some serious money... Edgars group all dressed up but going ... Nando's going cheep after nice result... Aplitec rises on vague prospects of Pro... |
Didata takes TCO in R345m IT deal
Members of the SA Railway and Harbour Workers' Union will become shareholders in Didata, writes SHERILEE BRIDGE
The acquisition, which is still to be approved by TCO's major shareholders, will see TCO become a subsidiary of R16-billion IT colossus Didata. TCO's entire share capital will be acquired by swapping one Didata share for nine of the smaller company's shares. This will make major TCO shareholders, including its management and staff, a private investment consortium and the SA Railway and Harbour Workers' Union (Sarhwu), new Didata shareholders. Sarhwu will be the first union with a sizeable shareholding to come close to Didata. Jeremy Ord, chairman of Didata, says the deal was a logical step from a close working relationship already established between the two parties. The deal has been compared to Didata's acquisition of Internet Solutions in terms of the synergies of corporate cultures and added intellectual capital. TCO, which was courted by other IT blue chips, feels the deal is a victory for smaller venture capital companies without a history but with a strong vision. This acquisition is also expected to mark the formal start of an industry trend towards consolidation driven by the slide in the domestic equity market in September after being driven to dizzy heights earlier in the year. Ord says TCO, which will fall under the group's networking arm DDN, brings on board skills Didata was lacking. Revenue-earning opportunities are immense, he says. Through its skills strengths as a Microsoft-certified solutions provider, TCO takes Didata's alliance with US-based networking giant Cisco further to complete its service offering by extending network solutions from the server to the desktop. "The combined services of Didata and TCO will mean we will be unparalleled in SA," says Ord. He says the acquisition will enhance its managed online network, which was established to provide a remote network and support management to corporates in line with global trends. TCO listed in July with a market capitalisation of R60-million and an executive management core formed out of Siemens Nixdorf's successful outsourcing division. TCO chief financial officer Wayne Brett says it was a difficult decision to give up independence after only a few months, but the deal will fast-track the company's previous plans of going international within two years. "From a business and longer-term growth perspective the deal makes perfect sense," says Brett. He says the company hit critical mass very quickly and the deal will now allow TCO to double in size immediately. TCO's earnings are expected to be approximately four times that predicted in its prelisting statement. Brett says it was in the interests of its staff and shareholders to take advantage of Didata's globalisation plans and its smart local moves into the telecommunications arena. Didata is remoulding to fit the hot areas of communications, software application, Internet, e-commerce and customer management. The group is also seeking a secondary listing on the London Stock Exchange or New York's Nasdaq within a year. "We want to replicate our business globally," says Ord. It analysts were not surprised by the move. Most agreed that more IT companies would merge with bigger IT groups or fall by the wayside. One analyst predicted that only half the IT companies currently on the JSE would still be listed within five years.
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