South African IT firm Dimension Data has announced the outcome of the US$152 Million Black Economic Empowerment (BEE) transaction it signed with the BEE Consortium eight years ago.
The firm said that the money will be paid to the various BEE individuals and organisations.
Andile Ngcaba, who leads the BEE Consortium and is Dimension Data Middle East & Africa (DDMEA) chairman, will re-invest his full stake back into the DDMEA business
Jeremy Ord, Dimension Data Holdings plc Chairman said: “The BEE vesting represents another milestone in Dimension Data’s 30 year history. Although the Group was acquired by Japan-based NTT in 2010 – and before that held its primary listing on the London Stock Exchange – the local shareholding in DDMEA remained intact. We remain a proudly South African company headquartered in Johannesburg.”
At the time of signing the deal in September 2004, the consortium comprised of the following groupings:
- Ngcaba Holdings (now a subsidiary of Convergence Partners);
- Safika Holdings;
- A group of broad-based BEE participants comprising Previously Disadvantaged Individual employees of Dimension Data and other key PDIs;
- Nine broad-based groups.
The BEE Consortium also held close to 25 percent equity stake in Dimension Data South Africa – now Dimension Data Middle East and Africa – valued at US$ 45 million. The transaction was substantially vendor-financed on a notional basis.
In December 2010, when Safika exited the consortium, Convergence Partners acquired some 50 percent of Safika’s 5 percent shareholding, with Dimension Data acquiring the balance.
Ngcaba will re-invest his stake through Convergence Partners, while PDI employees who worked for Dimension Data during the empowerment period were paid in full on September 7.
Ord said that Dimension Data Holdings remains extremely proud of what Convergence Partners and DDMEA have achieved together in the last eight years ago enabling the consortium to earn equity in the company.
“We drew up an internal transformation charter to ensure that DDMEA addressed all the pillars of transformation including management, education, and corporate social responsibility. In value creation terms, this is one of the most successful BEE transactions in South Africa across all sectors.”
The broad-based groupings chose to remain invested in the company and be part of the Dimension Data ownership structure.
Dimension Data thus retains its current Black Economic Empowerment status.
“Andile has played a key operational role transforming the DDMEA business. Transformation is an on-going strategic business imperative – not a period in time or a transaction – and the Group remains committed to deepening transformation across the business,” said Ord.
Ngcaba said: “Our broad-based groups – represented by the Dimension Data Community Development Trust in the future – are critical to sustainable development in South Africa.
“Our goal is to ensure they are provided with ongoing business support and guidance. In addition, the groups in the Dimension Data Community Development Trust will receive an annual financial distribution so that they can expand their services and grow their reach within their communities.”
According to Ngcaba, Dimension Data remains an important investment in the Convergence Partners’ portfolio and looks forward to strengthen its ongoing business relationship by building on the solid foundation created in the last eight years of partnership.
“We look forward to a long-term relationship with Dimension Data which is poised for continued growth in Africa and the Middle East. Our shared vision for DDMEA is to grow its capability and presence on the African Continent and adapting to the rapidly changing technology sector, built on its significant capabilities in the cloud, video, and Internet environment we are entering,” he added.