Johannesburg, 15 Mar 2001
Dimension Data is to buy a North Carolina-based systems integration firm for $138 million in cash, a deal which sees the London-listed group extend its US presence in the south-eastern US and Texas.
The acquisition of Charlotte-based Premier Systems Integrators comes just a week after Dimension Data announced its intention to establish a national presence in the US within 12 to 18 months.
The agreement, which is effective from 1 April this year, is still subject to due diligence and approval of the boards of both companies and US anti-trust authorities.
An initial cash payment of $114.5 million will be paid upfront, with the balance deferred over 18 months.
Venture capitalists JP Morgan Partners, Frontenac and Salt Creek Ventures, which hold 46% in Premier, will be paid out in full at closing.
The company will adopt the Dimension Data brand immediately.
Premier designs, provisions, builds and manages Internet and intranet infrastructures that support business-critical applications. Clients include Hughes Network Systems, BMW, Telefonos De Mexico (Tracfone) Premdor, Georgia Pacific, Net 2000 and Winstar.
Premier reported profit before tax of $9.1 million excluding the managed service operating losses of its wholly owned subsidiary, i-bridge, of $5.4 million for the 12 months to 31 December 2000. I-bridge is expected to become profitable in the first quarter of this year.
Dimension Data US president Peter Hird says about 30% of Premier`s earnings are derived from networking infrastructure solutions while the balance of its business is generated from the high-growth server/storage market and application management.
"We view these skills as critical in the provision of intelligent infrastructure services to our client base. In addition, it affords the group the ability to leverage these capabilities across our other geographical regions in the US."
Premier`s senior management has signed three-year agreements with Dimension Data.
"Premier is an excellent fit with Dimension Data`s global vision in terms of management culture and skill sets. It has significant depth of technical skills with over 60% of its 240 employees being billable technical resources," says Hird.
The company`s technology partners include EMC2, Oracle, Cisco, Sun, Hewlett-Packard and Microsoft.
Premier founder and chairman Don Doctor will assume responsibility for Dimension Data operations in south-eastern US.
Related stories:
Dimension Data outlines US strategy
Share