Dimension Data announces outcome of the 2004 BEE transaction
Dimension Data announces outcome of the 2004 BEE transaction
Dimension Data released details today of the R1.26 billion outcome of the Black Economic Empowerment (BEE) transaction it signed with the BEE Consortium in September 2004. The consortium is led by Andile Ngcaba. Ngcaba who is chairman of Dimension Data Middle East & Africa (DDMEA) said he will, through Convergence Partners, remain a shareholder, together with 35 broad-based groups that provide support and care to over 45,000 vulnerable individuals in the nine provinces of South Africa. He will also remain chairman of DDMEA.
In 2004, the BEE Consortium held a 25.01% equity stake in Dimension Data South Africa (DDSA) (now DDMEA) valued at R380 million.
In December 2010, when Safika exited the consortium, Convergence Partners acquired 50.01% of Safika’s 5% shareholding, with Dimension Data acquiring the balance.
The total value of the transaction that will be paid to the various BEE individuals and organisations is R1.26 billion. Ngcaba – through Convergence Partners – is re-investing his full stake back into the DDMEA business, while PDI employees who worked for Dimension Data during the empowerment period will be paid in full.
The broad-based groups – up to 35 from the initial nine in 2004 – who touch over 45,000 vulnerable individuals through their support and care, will receive an initial cash distribution. And in a precedent-setting initiative, the broad-based groupings have elected to remain invested and therefore be part of the Dimension Data ownership structure in the future. Going forward, Dimension Data retains its current empowerment status.
Speaking in his capacity as Chairman of DDMEA, 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.”
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. We are extremely proud of what Convergence Partners and DDMEA have achieved together. When the transaction was signed over eight years ago, the vendor-financed structure was extremely innovative in that it enabled the consortium to earn equity in the company. At the same time, we drew up an internal transformation charter to ensure the 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.
“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,”Dimension Data remains an important investment in the Convergence Partners’ portfolio and we look forward to strengthening our ongoing business relationship; building on the solid foundation created in the last 8 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.
To the Trustees of Dimension Data Community Development Trust: Dr. Brigalia Bam; Prof. Sibusiso Bhengu; Mama Seroke and the late Adelaide Tambo, I wish to extend my heartfelt gratitude and admiration for serving the beneficiaries with integrity and distinction over the past 8 years.”