End of an era for DiData
Tuesday next week will be the last time Dimension Data shareholders can trade stock in the company on the Johannesburg bourse, although the London listing will remain in place for some time.
Dimension Data, once the darling of the stock exchange, is expected to be delisted around mid-December, after 23 years. The company's listing on the London Stock Exchange will also be terminated after 10 years, following a successful R24.2 billion buyout bid by Japan-based Nippon Telegraph and Telephone Corporation (NTT).
Yesterday, the company put out an announcement, saying trade in DiData shares on the JSE would stop on Tuesday. Shares listed on the London Stock Exchange will continue as normal until delisting.
DiData was listed on the JSE on 15 July l987, at 11am, at a price of 150c a share, which raised R7.5 million. The company listed on the London exchange in July 2000. Its share price closed at R13.01 in Johannesburg yesterday, a 10c or 0.76% decline on the day.
Although investors will now lose out on the option to buy shares, DiData is expected to retain its branding and identity, and key management will be kept in place.
School chums' vision
The company was founded in 1983 by three school friends, including the current chairman Jeremy Ord, who was appointed chairman in the same year as DiData listed in Johannesburg. It now has operations in 49 countries on six continents and more than 11 500 staff.
In 1993, the company expanded into Botswana, and between 1995 and 1997, Dimension Data cast its net outside the African continent and focused on expansion in the Asia Pacific region. In 1996, it bought a stake in Internet Solutions and moved into Australia.
A year later, it bought a majority stake in The Merchants Group and acquired Datacraft, as well as increasing its Internet Solutions stake.
Between 1998 and 2000, the company focused on expanding into the Northern Hemisphere and listed in London. It also made acquisitions to gain a foothold in new markets in Europe, North America and the UK. In 1998, it also established a new telecommunications company with the acquisition of Plessey - a joint venture with WorldWide African Investment Holdings.
By 2003, its revenue moved over the $2 billion mark, which doubled in the year to September 2009. In 2004, Ord was made group executive chairman; Brett Dawson was appointed CEO; and David Sherriffs appointed CFO.
In the next few years, the company expanded in Africa, South America and the Middle East as well as boosting its stakes in Internet Solutions and Plessey.
Chris Gilmour, Absa Investments analyst, says Dimension Data listed long before IT became a big buzz and was a pioneer in the field. “They were the darlings of the stock exchange at the time. You had to have Dimension Data in your institutional portfolio, or you were nothing.”
Gilmour says before the dotcom crash early last decade, DiData “could not put a foot wrong”. At one point, in late 2000, the company's shares hit R70, says Gilmour. However, these gains were wiped out during the dotcom crash and DiData stock fell to below R2 a share in 2003.
Today, its share price is trading at the same level as around 1996, says Gilmour. After its 2000 London listing, Dimension Data became a high profile company and there were many rumours that it would be bought out, including one that mentioned British Telecom, adds Gilmour.
Although the company's removal from the local bourse will make hardly any difference to the total value of the JSE, it will limit investment options in the IT sector, he adds. Dimension Data is the biggest IT stock on the market, with a market capitalisation of R22.3 billion.