Dimension Data has made an open market offer to purchase 100% of the issued share capital of Nairobi Stock Exchange-listed AccessKenya for 14 Kenyan Shillings (KES14) per share (R1.50).
Based on the 218 million shares in issue, this is equivalent to KES3.05 billion - about R327.6 million.
According to a statement by DiData today, the offer is a premium of 42% above the closing price of KES9.85 on 3 May. It is also a a premium over the volume weighted average price (VWAP) of AccessKenya's shares of 55% for the 30 day VWAP; 105% for the 90 day VWAP and 155% for the 250 day VWAP.
"AccessKenya shareholders will also be entitled to receive the final dividend of KES0.30 per AccessKenya share proposed by the AccessKenya board in respect of the year ended 31 December 2012."
AcessKenya origin
Founded by brothers David and Jonathan Somen, the AccessKenya Group was one of the first Internet service providers to launch in Kenya in 2000.
The company, which was also the first ICTcompany to list on the Nairobi Securities Exchange, employs 340 staff, and provides predominantly connectivity-based data services to about 5 000 corporate customers - in Kenya.
AccessKenya owns and operates a 400 kilometre Carrier Ethernet Fibre Optic Network in both Nairobi and Mombasa, which connects over 500 commercial buildings. The company also operates two wireless networks which further extends coverage to 10 other towns around Kenya.
In addition to offering a wholesale carrier services, AccessKenya also has a high-end consumer base. AccessKenya's IT services arm focuses on value-added IT services including IT support, offsite backup and Disaster Recovery, email and security services, as well as other managed IT services into the customer's local area network. Last year the company's turnover was KES1.9 billion (about R204 million), with earnings before interest, taxes, depreciation and amortisation of KES700 million (about R75 million).
Sub-Saharan strategy
DiData currently operates in Kenya through subsidiaries Dimension Data Kenya, Internet Solutions Kenya, and Plessey Kenya. The company says it intends to merge its Internet Solutions Kenya business into Access Kenya.
Derek Wilcocks, DiData's Middle East and Africa CEO, says the acquisition of AccessKenya is in line with the firm's goal to pursue a strategy of expansion in sub-Saharan Africa.
"The growth opportunities and liberal and progressive ICT regulatory framework within Kenya make this market highly attractive for Dimension Data to establish an even stronger presence. IS Kenya and AccessKenya have worked together on mutual clients for some years. In addition, we have good relationships, and there is also a strong strategic fit between the businesses."
The transaction is contingent on shareholder acceptance and various regulatory approvals.
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