Johannesburg, 09 Mar 2001
Dimension Data is planning to establish a national presence in North America, by way of a series of acquisitions, within the next 12 to 18 months.
Executive chairman Jeremy Ord says there is no national network services company in the US, which means the group will have to make several acquisitions. The process will take between 12 and 18 months to complete.
However, Dimension Data wants to make a single large acquisition in the i-Commerce area to overlay its network services offering.
The group has narrowed prospective acquisitions in the i-Commerce area to two companies, says i-Commerce global MD Robbie Taylor.
Adrian Liddiard, who is responsible for the group`s acquisitive business in the US, describes five companies in the network services sector as "appealing", although 10 are being courted.
"We could get there a lot quicker than 12 months, but we would not end up with companies we want to be with," he says. The group would prefer to take longer to look at companies and end up with better acquisitions.
Liddiard says Dimension Data has looked at about 50 companies in the network services space, and is continually eyeing Chicago, Atlanta, Texas and the west coast.
The companies it has examined to date were revenue-focused, rather than profit-focused, and many lacked the necessary depth of management, which precluded an acquisition.
The group apparently almost concluded a US acquisition towards the end of last year, but withdrew. Ord says the decision has proved to be a good one.
Patrick Quarmby, director of corporate finance, says there has been "tremendous hype" regarding companies` valuations, but in the past six months those companies have been coming to terms with their valuation, and more realistic perceptions are beginning to come through.
He says Dimension Data has found good companies, but their valuations were over-inflated. He comments that it is simply taking time before their perceptions line up with those of Dimension Data.
Ord says the European gaps identified at the time of the London listing last year - Scandinavia, Spain, Italy and Portugal - are still there.
He says the group almost made a Scandinavian buy last year, but the difference in the value placed by Dimension Data and the seller was too great.
He adds that if it cannot make the right acquisitions in North America or Europe, the group will have to set up its own operations.
Financial director Malcolm Rutherford says the group will become a major player in the US and aims to list on one of the stock exchanges in the country.
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