Johannesburg, 06 Oct 2011
Japanese-based Hitachi Data Systems is buying South African firm Shoden Data Systems in a bid to boost its presence on the continent.
New York- and Tokyo-listed Hitachi yesterday said it was buying Shoden through its wholly-owned HDS subsidiary for an undisclosed amount. Shoden, HDS' only representation in SA, has partnered with the Japanese firm since its inception 11 years ago.
Hitachi says in a statement that the proposed acquisition “will form a key element of the company's growth strategy throughout Africa”. Shoden provides data centre technology solutions in SA and across sub-Saharan Africa.
Tony Reid, CTO of HDS in the UK, Ireland and sub-Saharan Africa, says buying Shoden will give HDS the footprint it needs in the region. He says Shoden was already expanding into Africa and this drive will continue.
Shoden, which has about 140 staff members, is based in Johannesburg and has subsidiaries in the UK, as well as in Nigeria, Ghana, Kenya, Uganda and Tanzania.
Reid says HDS wants to tap into Africa's growth potential. According to data from the International Monetary Fund, seven of the top 10 fastest growing economies from 2011 to 2015 will be in Africa.
Hitachi, founded in 1910, has about 360 000 employees worldwide. In the year to March, it turned over about $112.2 billion, or about R905.8 billion. HDS has over 4 900 staff members and operates in more than 100 countries and regions.
Niels Svenningsen, senior VP and GM of HDS in Europe, Middle East and Africa, says the proposed buyout “is the natural next step in a relationship that has blossomed throughout the years”. The joint company will be committed to “continue to grow across Africa,” he notes.
Ideal choice
Hannes Fourie, IDC senior analyst for systems and infrastructure solutions, says the deal makes sense for HDS as Africa is a large market, and SA is a good country from which to expand. “For HDS, it's a very good market to play in.”
Fourie says IBM and EMC are currently the local market leaders. He does not anticipate the deal having a massive impact on the market. However, storage is a good growth area as demand for capacity doubles every two-and-a-half years, he adds.
“Storage is one of the fastest growing markets globally,” says Fourie. Although Africa's move towards cloud computing is still about a year away, buying out Shoden puts HDS in a good position to benefit from this technology shift.
The deal is subject to regulatory clearances but is expected to be wrapped up by the end of the year. HDS will release more details once the acquisition has been approved.