Altech enters African data market
Posted Tue, 04 Mar 2008
Allied Technologies has acquired a controlling interest in three Kenyan information technology companies from Nairobi-based Sameer Group for a total of US$85.2-million (R661.8-million), giving the South African company a foothold in the east and central African telecommunications and bandwidth market.
The transaction will see Allied Technologies (Altech) acquire majority stakes in Kenya Data Networks (KDN), Swift Global and Infocom Limited from the Sameer Group, one of the most prominent businesses in east Africa with an annual turnover of over $1-billion.
"These acquisitions support our strategy of moving up the telecoms value chain, expanding our geographic presence in Africa and operating at technology's cutting edge," Altech CEO Craig Venter said in a statement this week. "We are now the leading broadband network operator in east and central Africa."
KDN is a full service digital communications provider in Kenya, that operates a 1 000km fibre line from Mombasa to
Nairobi, an additional 450km of fibre in Nairobi, a fibre link to the Uganda border and over 450 WiFi hotspots.
It has an international gateway licence for Kenya and advanced plans to expand to other African countries, including the DRC, Rwanda, Uganda, Tanzania, Burundi, Zambia and Malawi, and also intends to participate in a future African east coast undersea cable system.
Swift is a leading internet service provider in Kenya and Tanzania, targeting mainly business users by providing virtual private network, Voice over Internet Protocol (VoIP) services and wireless solutions, and utilises KDN's infrastructure and network capacity.
Infocom offers broadband, internet and IT services in Uganda. It is licensed to offer full communications services, including international traffic, as well as voice, data and video over any medium and technology. The company operates a satellite based international gateway and is the only wireless broadband provider - using WiMax
technology - in Uganda.
Regional, continental ambitions
"The acquisitions provide us with access to Sameer's regional expertise," Venter said, adding that Altech and Sameer had forged an alliance to pursue further opportunities in the region.
Explaining the rationale behind the acquisition, Venter said that by buying into an already established business, Altech avoided having to spend huge sums of money on starting a new network and applying for scarce network licences.
In return, the Sameer Group is looking to foster cooperation in other industries with Altech's sister companies, such as Powertech and Bytes Technology Group - all subsidiaries of the JSE-listed Allied Electronics Corporation (Altron).
Venter said that the envisaged long-term partnership with the Sameer Group, which was a substantial company with significant skills and contacts in the region, gave Altech a strategic advantage in its quest to become the
pre-eminent data operator in east Africa.
"Partnering with Altech is in line with the group's policy to look for strong strategic partnerships with the aim of increasing the portfolio of products and services and improving the service quality offered," said Sameer Group chairman Naushad Merali. "We identified Altech as the perfect fit for our Pan-African strategy and expansion."
The acquisitions follow the completion of a satisfactory due diligence of KDN, Swift and Infocom by Altech, approvals by the board of Altech, the South African Reserve Bank and by the relevant regulatory authorities in Kenya and Uganda.
"Outside of these acquisitions, Altech is pursuing other initiatives in its quest to become a prominent broadband network operator on the African continent," the company statement read. "Altech has already acquired usage rights to world leading technology from Xiocom Wireless Incorporated (USA) and is in the process of establishing a greenfields network
operation in Rwanda."
SAinfo reporter
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