JSE-listed ICT services company ConvergeNet has acquired a 51% stake in smaller Internet service provider (ISP), XDSL.
The deal is reportedly valued at R5 million. According to the company, the acquisition is "further proof" of its aggressive strategy to acquire smaller ISPs that will benefit from a buyout and provide XDSL with an increased user base.
In February last year, ConvergeNet underwent a management change. By July, it had made four acquisitions. These included ConvergeNet SA, Structured Connectivity Solutions (SCS), Sizwe Africa IT Group and Telesto Communications.
Subsidiary ConvergeNet made further acquisitions. It bought 74% of prepaid cellular operator Future Cell for R68 million and secured an additional 19% interest in SCS for R13.3 million.
Gordon Edwards, executive director at ConvergeNet, says XDSL is an ideal partner for the company. "XDSL will allow us to take a quality, service-oriented ISP service to these markets with many value-added benefits, creating a differentiator for us in these new markets."
XDSL director Danie Fourie says the business is poised to become a tier one service provider. "Through its majority shareholding, ConvergeNet provides us with the support we need to successfully grow the business. In addition, it bolsters our black economic empowerment status, positioning us more favourably in the market."
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