In a deal valued at R10,5 million, recently listed NetActive has bought the NetChauffeur managed Internet dial-up service from fellow listed company Ixchange. With this acquisition NetActive assumes all technology, customers and associated personnel from Ixchange.
NetChauffeur is a fully managed Internet connectivity service, which has been implemented at more than 230 customer sites around South Africa. It is specifically focused on the small to medium enterprise (SME) market, where it forms an ideal solution for companies which need a full, multi-user Internet service, but cannot cost-justify or obtain a leased-line service.
The purchase is to be funded in shares and cash, initiating a mutually beneficial partnership with Ixchange.
The acquisition will boost NetActive`s small to medium enterprise (SME) market share and confirm the Internet service provider`s position as an SME Internet specialist. Furthermore, Ixchange will work closely with NetActive to develop growth opportunities into the SME market, with both companies providing products and services that complement each other and with the level of service that stems from a narrow focus.
Says Lawrence Brick, CEO of NetActive: "The installed base of over 230 NetChauffeur clients will provide a good opportunity for cross- and up- selling other NetActive services such as networking, hosting and web design. We are the only local Internet business with as comprehensive an offering to the SME market. NetActive is able to take over this client base without any significant increase in overhead infrastructure as it fits well with our existing offering."
At present there are approximately 360 000 SME business in South Africa. Recent research by BMI-Tech into the SME-market found that this sector has recognised the need to expand onto the Internet. The Internet is increasingly being viewed as an integral part of SME`s daily operations.
"NetActive has a strong focus on the SME market and already has a complementary product, Business Internet Solutions (BIS). The addition of the Microsoft based NetChauffeur to the Linux-based BIS will ensure a platform-independent offering. We are now in a position to offer a comprehensive solution regardless of the SME`s operating platform," says Brick.
Dana Buys, Chairman of Ixchange says ,"Since September 1998, Ixchange has repeatedly stated that its core long term focus would be on the GoldMine customer relationship management environment (Bendata plus GoldMine), and Ability (Enterprise Management Solutions) divisions. With this sale we are another step closer to that stated objective. The NetChauffeur business is a good business for an Internet Service Provider with a focus on providing ISP services to the SME market. NetActive fits this mould perfectly".
Adds Brick, "NetActive aims to become the leading provider of turnkey information technology solutions to the SME market over the next 12 months. Purchasing NetChauffeur is integral to this strategy."
The majority of SME`s have little technical expertise and therefore do not have the knowledge nor the time required to implement and maintain full networking, Internet connectivity and web solutions in their business. NetActive has a full spectrum of products and services aimed at this market segment and is well positioned to offer a total solution.
Concludes Bricks, "We are confident that the acquisition of NetChauffeur and the new relationship with Ixchange will be of benefit to the SME market."
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