By Nicholas Mayes
Having established itself as a key European player with the R8.1bn ($1.32bn) take-over of Comparex Holdings’ European operations last week, Dimension Data, the South African networking services group, has made its first acquisition in the US. It has bought a 70% stake in New Jersey-based, The RE/COM Group Inc, which claims to be one of the country’s fastest-growing networking VARs. Shares in Didata, which is listed on the Johannesburg, South Africa stock exchange, rose 3.81% to R3, 135 on news of the deal.
The acquisition, which was paid in cash, is estimated to have been worth $40m, which is equivalent to RE/COM’s 1998 sales. It is expecting to grow sales by 50% to $60m in 2000. RE/COM management will retain a 30% stake in the company, although Didata has an option to increase its shareholding to 100% over the next three years. RE/COM sells Cisco-only voice and data communications solutions to ISPs, Fortune 500 companies and public sector companies and also designs and installs LAN and WAN solutions. It is expecting to become a Cisco Gold Partner in February 2000. The company has offices in Denver and San Francisco.
After the Comparex deal, the US was the only missing piece of the jigsaw for Didata. It already has offices in Africa, Asia, Australia and Europe. Bruce Watson, Global Communications Services Director at Didata, says: The US comprises 52% of the global network services market. Cisco’s budget for the New York market alone is bigger than its UK budget. Didata is now the third largest networking services company in the world behind IBM and INS and is forecasting sales of R9bn ($1.46bn) and after-tax profits of R1bn ($162.7m) for the year to September 2000.
