Arivia.kom sale imminent

By Nicola Mawson for arivia.kom

Johannesburg, 24 Aug 2009

State transport utility Transnet has finally confirmed it has selected a “preferred bidder”, and says the sale of IT services provider arivia.kom should be wrapped up in the “year ahead”.

Transnet says in its latest annual report that it completed an “indicative Gartner consulting worldwide IT benchmark” during its past financial year to March. “The benchmark report is being used as a base for arivia.kom outsource negotiations.”

The utility says the sale is “well under way”, as the request for proposal and due diligence phases have been completed. Arivia provides IT services to Eskom and Transnet, and the company that buys it would enter a service agreement with the state-owned enterprises.

“One preferred bidder has been selected, and Transnet envisages completing the process in the year ahead,” it says, without naming the bidder. However, it is understood that final negotiations between arivia and T-Systems SA are under way.

Dragging on

The sale will be a relief to staff, who have been caught in the middle since the move was announced in early 2006.

In June, Transnet acting CEO Chris Wells said the unit should be sold this year, but if a deal was not “advantageous”, Transnet would rethink its strategy.

The sale includes two large-scale arivia outsourcing contracts, for the provision of IT services to the electricity and transport utilities. The five-year outsourcing agreements are worth around R400 million and R200 million a year for Eskom and Transnet, respectively.

In January, T-Systems SA received the nod from government stakeholders for the purchase of arivia. The company qualified for the next phase of the transaction, which was intended to explore terms and conditions, as well as commercial details of the deal.

At the time, it seemed the deal would be complete in the first quarter of this year.

So far, the sale has been characterised by a media blackout on the part of arivia's shareholders, who have steadfastly refused to comment throughout the process. Similarly, bidders have been gagged through non-disclosure agreements.