Acquisition highlights
Dimension Data takes a strategic 25% equity stake in Paracon
SilverLine is an excellent fit with Paracon`s IT Services division
Paracon`s expertise in the IT services arena will add significant value to the existing SilverLine business
Paracon will have access to a larger client base
Paracon is the provider of choice for Dimension Data`s i-Commerce Services resourcing needs locally and will become the preferred supplier to the Dimension Data Group
Dimension Data gains increased access to global IT resources
Dimension Data and Paracon Holdings Limited (Paracon) today announced that Paracon has acquired SilverLine, a leader in the IT contracting industry while Dimension Data has taken a 25% stake in Paracon.
The acquisition, effective from the close of business on 30 June 2000, amounts to R67,5 million, and will be settled by the issue of 51,9 million new Paracon ordinary shares. This will give Dimension Data a 12,5% stake of Paracon, which will subsequently be increased to 25% through the purchase of a further 54,9 million Paracon shares.
Dimension Data will obtain the 54,9 million shares through the issue of 11,4 million Paracon shares for cash and the balance from existing Paracon shareholders.
"Dimension Data`s stake in Paracon is of strategic importance for our group as Paracon will now become the provider of choice for Dimension Data`s i-Commerce services locally and the preferred provider to the Dimension Data Group. We will also benefit from Dimension Data`s knowledge and experience in the global IT arena," said Paracon CEO Mark Jurgens.
"The SilverLine acquisition provides an excellent fit with our core IT services division and we believe that our expertise and competencies in IT resourcing will add significant value to SilverLine."
According to a Deutsche Bank report (27 July 2000) staffing companies are the "Agents of New Economy Assets".
Rob Taylor, managing director, Dimension Data i-Commerce, says the deal underscores this trend.
"Paracon has a strong, young and ambitious team with a good earnings growth track record. The deal will allow for greater exploitation of the synergies between Paracon and SilverLine. It also achieves focus for Dimension Data and gives the Group access to additional global resources and skills. This is increasingly important to the Group`s i-Commerce strategy as it extends its global reach," says Taylor.
Dimension Data will appoint two non-executive members to the board of Paracon. Janette Cummings, Managing Director of SilverLine, will be appointed as an executive director of the Paracon board.
Share