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Companies shop up a storm during festive season

With a number of acquisitions, proposed acquisitions and mergers taking place, ’twas the season to fill your trolley.
Read time 12min 30sec

Multiple acquisitions and investments, plus a host of deals in the pipeline, dominated the international ICT market during the past six weeks (although only a selection is included here).

At home, the raft of announcements by the communications minister stole much of the local ICT media space.

Key local news of the past six weeks

  • Very good year-end figures from AYO Technology Solutions, with revenue up 206.7% and profit up 47.9%.
  • Interim losses from 4Sight Holdings, although revenue up 17.7%; and Sebata Holdings, with revenue down 5.6%.
  • Full-year losses from AEEI, although revenue up 242.7%; and Labat Africa, although revenue up 737.7%.
  • Negative trading updates from AEEI and Ellies.
  • Altron acquired Ubusha Technologies, a next-generation IT security services provider, for R360 million.
  • Link Africa, a wholesale fibre telecommunications network provider, bought additional nationwide fibre-optic network infrastructure from Internet Solutions, which gives it more than 400 points of presence across SA.
  • CapaciTech, a venture capital firm, made a R2.5 million investment in Gotbot AI, a local AI start-up.
  • 4 Africa Exchange Proprietary (4AX), a licensed equity and debt exchange, has announced the listings of iHealthcare Group and iHealthcare Group Holdings.
  • A battle of authority is brewing between the Competition Commission (CompCom) and ICASA over data pricing, following a damaging finding by the CompCom that MTN and Vodacom are perpetuating the high costs of data.
  • Dimension Data has sold its office, The Campus, to a black women-owned company.
  • Dimension Data MEA has launched a new security services subsidiary, Dimension Data Security.

A battle of authority is brewing between the Competition Commission and ICASA over data pricing.

  • EOH Abantu, a wholly-owned subsidiary of EOH, has entered into an agreement with Afrocentric Health for its shares in Dental Information Systems Holdings for R250 million.
  • The Housatonic Consortium has submitted a conditional, non-binding offer in terms of which it indicated its intention to make an offer to acquire the entire issued ordinary share capital of Metrofile.
  • Kyocera Document Solutions South Africa has sold a stake in its business to Nozala Women, in a deal that will allow additional equity for black women, raising the stake of the latter from 15% to 35%.
  • The NOSA Group has entered into an agreement to acquire QPRO and SAIGAS, the Assurance South African businesses of SAI Global, a provider of integrated risk management solutions and assurance services.
  • Communications and digital technologies minister Stella Ndabeni-Abrahams announced administrators for SITA and USAASA for a period of 24 months; the merger of Sentech and Broadband Infraco into a new state infrastructure company; and the merger of ICASA, the Film and Publication Board and the ZA Domain Name Authority.
  • The JSE has lifted the suspension of the trading of 4Sight Holdings’ shares.
  • A new JSE cautionary by Metrofile.
  • A renewed JSE cautionary by AYO Technology Solutions.
  • The appointments of January Hnizdo as CEO of Teraco; Mcebisi Jonas as chairman of the MTN Group; and Andrew Mthembu as interim chairman of EOH.
  • The resignation of Lex Van Wyk, CEO of Teraco.
  • The departure of Phuthuma Nhleko, chairman of the MTN Group.
  • The death of Xolani Humphrey Mkhwanazi, chairman of EOH.

Key African news

  • Vodafone Ghana acquired Vodacom Group's entire stake in Vodacom Business Ghana.
  • Airtel Africa will list its Malawi business on the local stock exchange.
  • IHS Towers has agreed to buy Brazilian telecoms infrastructure company Cell Site Solutions.
  • American Tower has reached an agreement with MTN Group to acquire the latter’s minority stakes in each of the company’s joint ventures in Ghana and Uganda, for total consideration of approximately $523 million.
  • Nigeria’s attorney-general has dropped its $2 billion tax demand on MTN.
  • Orange has opened its African HQ in Morocco.
  • The appointments of Jean-Paul Clemente as MD of HPE Africa and DOM-COM; Marco Fanizzi as VP of EMEA for Commvault; Richard Massey as regional VP of the EMEA channel for RingCentral; Kendi Ntwiga-Nderitu as head of Microsoft’s Kenyan office; Yousif Mohamed as CEO of Sudatel; and Thomas Rollin as director: global accounts for Nutanix’s EMEA region.
  • The resignation of Sebuh Haileleul, head of Microsoft Kenya.

Key international news

  • Accenture acquired the Apis Group, a privately held Australian consultancy with deep industry expertise providing strategic advisory, digital design and delivery services to government organisations.
  • Apple bought UK-based start-up Spectral Edge, which is known for technology that can be used to improve photos taken on iPhones.
  • Check Point Software Technologies purchased Protego, a new serverless security technology company.
  • Cisco acquired Exablaze, an Australia-based company that designs and builds advanced networking gear based on field programmable gate arrays.
  • Facebook bought PlayGiga, a Spanish cloud gaming start-up, and Packagd, a small video shopping start-up.
  • Fortinet purchased CyberSponse, a leading security orchestration, automation and response platform provider.
  • Google acquired Canada-based Typhoon Studios.
  • Intel bought artificial intelligence chip start-up Habana Labs for $2 billion.
  • JD Power, a Thoma Bravo company, purchased Trilogy Automotive, the automotive software division of Trilogy Enterprises.
  • Mimecast acquired Segasec, a provider of digital threat protection.
  • NCR bought UK-based Zynstra, a provider of edge virtualisation technology.
  • NTT Data Services purchased Flux7, a small AWS premier consulting partner, in a move to expand and accelerate its ability to help clients bring their IT workloads to the cloud.
  • Tenable acquired Indegy, a leader in industrial cyber security, which provides visibility, security and control across operational technology environments.
  • Waymo, the self-driving vehicle unit of Alphabet, bought Latent Logic, a UK-based company using machine learning to develop autonomous driving systems.
  • Accenture has entered into an agreement to acquire Clarity Insights, a US-based data consultancy with deep data science, AI and machine learning expertise, as well as Symantec’s Cyber Security Services business from Broadcom, just two months after Broadcom closed its $107 billion acquisition of Symantec’s Enterprise Security business, which included the Cyber Security Services assets. Accenture has also hired a team, formerly of Sargon Solutions, that specialises in providing consulting and implementation services for integrated risk management.
  • Adobe plans to acquire Oculus Medium, a virtual reality tool created in Facebook’s Oculus division that allows users to sculpt, model and paint in a VR environment.
  • American Tower has closed its previously announced $1.85 billion acquisition of Eaton Towers.
  • Apax Partners has agreed to buy Coalfire, a provider of cyber security advisory and assessment services.
  • Atos announced an agreement to acquire Maven Wave, a US-based business and technology consulting firm specialising in delivering digital transformation solutions for large enterprises.
  • Australia announced that technology giants such as Facebook and Google will have to agree to new rules to ensure they do not abuse their market power and damage competition, or the government will impose new controls on them.
  • Cincinnati Bell has agreed to be acquired by Brookfield Infrastructure Partners in a deal valued at about $2.6 billion.
  • CNBC’s latest Global CFO Council survey has named Amazon’s founder, CEO and president Jeff Bezos the most influential businessperson of the decade.
  • Dell-owned Boomi has agreed to acquire Unifi Software.
  • F5 Networks has agreed to purchase Shape Security, a privately held cyber security company, in a deal with an enterprise value of $1 billion.
  • Help/Systems has agreed to buy Clearswift, a UK-based content threat protection software company.
  • JD Power is to merge with Autodata Solutions, a provider of data and software solutions for the automotive ecosystem.
  • LogMeIn has entered into an agreement to be acquired by Francisco Partners and Evergreen Coast Capital private equity affiliates in a deal valued at about $4.3 billion.
  • Orange plans to carve out its mobile towers in most European countries where it is present, in a move aimed at shoring up the telecom group's value as tough competition in the region has hampered its growth and margins. The first so-called national ‘TowerCos’ will be created in France and Spain, the company's two biggest markets.
  • Thoma Bravo has agreed to acquire Instructure, an education software provider, for about $2 billion.
  • The US FTC has broadened scrutiny of Amazon.com beyond its retail operations to include its cloud computing business.
  • Xperi and TiVo have entered into a definitive agreement to combine in an all-stock transaction, representing approximately $3 billion of combined enterprise value.
  • YY has changed its name JOYY.
  • In the annual changes to the constituents of the Nasdaq-100 index, from a technology perspective, the listings of Ansys, CDW and Splunk were added, and that of NortonLifeLock withdrawn.
  • Hangzhou Alibaba Venture Capital Management, an investment vehicle of Alibaba, invested (7.45%) in cloud computing start-up Harmonycloud.
  • Ichigo Asset Management, a Japanese asset manager, made an $830 million investment in Japan Display.
  • Mitsubishi and NTT made a 30% investment in Here Technologies, a digital mapping company.
  • Analog Devices filed a patent infringement lawsuit against Xilinx.
  • Sonos accused Google of stealing its technology and infringing on its patents.
  • Excellent quarterly results from Technical Communications (back in the black) and Zoom Video Communications (back in the black).
  • Excellent full-year numbers from Byju (back in the black).
  • Very good quarterly figures from Adobe.
  • Very good half-year figures from ITI (India), SDI and Solid State.
  • Good quarterly numbers from Aehr Test Systems (back in the black), Descartes Systems Group, Enghouse Systems, Paychex, SAIC, SeaChange International (back in the black) and Synnex.
  • Good half-year figures from Cohort.
  • Satisfactory quarterly results from Accenture, Ciena, Comtech Telecommunications, CSI, FactSet Research, Infosys and Verint Systems.
  • Mediocre quarterly results from Micron Technology and VOXX International.
  • Mixed quarterly figures from Broadcom, Jabil Circuit, Oracle, Photronics and Synopsys, with revenue up but net income down; and from Methode Electronics and Semtech, with revenue down but net income up.
  • Mixed half-year figures from Netalogue Technologies, with revenue up but net income down.
  • Mixed nine-month figures from Pintec, with revenue down but net income up.
  • Very poor quarterly figures from SMART Global Holdings.
  • Quarterly losses from BlackBerry, CalAmp, Cloudera, Coupa Software, CrowdStrike Holdings, DocuSign, Domo, Emcore, GameStop, Gridsum, Guidewire Software, IDT, Jianpu Technologies, Marvell Technology Group, Medallia, MongoDB, Okta, PagerDuty, Qutoutiao, Salesforce.com, SecureWorks, Slack Technologies, Smartsheet, Workday, Yext, Yunji, Zscalar and Zuora.
  • Half-year losses from Dixons Carphone, GSTechnologies and Orient Telecoms.
  • The appointments of Jeff Clarke as COO and vice-chairman of Dell; Bernie Han as CEO of Frontier Communications; Chitranjan Kesari as CEO of Netlynx Technologies; Sundar Pichai as CEO of Alphabet; and Jian Tang as CEO of iClick Interactive Asia Group.
  • The resignations of Sergey Brin, president and co-founder of Alphabet (stays on the board); Mike Nefkens, CEO of Resideo Technologies; Larry Page, CEO and co-founder of Alphabet (stays on the board); and Nir Sztern, CEO of Cellcom Israel.
  • The departure of Daniel McCarthy, CEO of Frontier Communications.
  • The deaths of Thomas Hart, chairman of QuickLogic, and David Phillips, founder and chairman of Northamber Solutions.
  • A satisfactory IPO on Nasdaq by Sprout Social, a powerful, centralised platform that provides the critical business layer to unlock the massive commercial value of social media.
  • A mediocre IPO on the NYSE by OneConnect Financial Technology, a leading technology as a service platform for financial institutions in China.
  • An excellent IPO on the NYSE by Bill.com, a leading provider of cloud-based software that simplifies, digitises and automates complex back-office financial operations for SMEs.

Research results and predictions

EMEA/Africa:

  • Interest in IOT will increase in the Middle East and Africa (MEA) region, with revenue expected to more than double by 2023, reaching an expected value of over $20 billion, according to GlobalData.
  • Consumer spending on technology in the MEA region is forecast to total $130.8 billion this year, a year-on-year increase of 4.1%, according to IDC.
  • The personal computing devices market has recorded its first year-on-year growth in 19 quarters, with 5.3 million units shipped across the region in Q319, an increase of 5.5% on Q318, according to IDC.
  • The African smartphone market saw shipments increase 4% quarter-on-quarter in Q319 to total 22.6 million units, according to IDC. The overall mobile phone market reached 55.8 million units in Q3 2019, with feature phones accounting for 59.4% of this total versus smartphones at 40.6%.
  • The EMEA market for gaming desktops and notebooks grew in Q319, increasing 2% year-on-year and totalling 2.2 million units, according to IDC. By the end of 2023, the market is expected to increase to 9.8 million units, with a four-year CAGR of 3.8%.

Worldwide:

  • Global server shipments are forecast to increase 5%-6% in 2020 after falling slightly in 2019, according to Digitimes Research.
  • Worldwide shipments of IOT enterprise drones will total 526 000 units this year, an increase of 50% from 2019, according to Gartner. Global shipments are forecast to reach 1.3 million units by 2023.
  • The number of 5G connections will grow from roughly 10 million in 2019 to 1.01 billion in 2023, according to IDC. This represents a compound annual growth rate (CAGR) of 217.2% over the 2019-2023 forecast period. By 2023, IDC expects 5G will represent 8.9% of all mobile device connections.
  • Worldwide spending on robotics systems and drones will be $128.7 billion in 2020, an increase of 17.1% over 2019, according to IDC. By 2023, it expects this spending will reach $241.4 billion, with a CAGR of 19.8%.

Stock market changes

  • JSE All share index: Up 3.9%
  • FTSE100: Up 3.3%
  • DAX: Up 1.7%
  • NYSE (Dow): Up 2.8% (all-time high reached during this period)
  • S&P 500: Up 4% (all-time high reached during this period)
  • Nasdaq: Up 5.9% (all-time high reached during this period)
  • Nikkei225: Up 2.4%
  • Hang Seng: Up 8.7%
  • Shanghai: Up 7.8%

Look out for

International:

  • Further developments regarding Xerox and its proposed acquisition of HP.
South Africa:
  • Further news regarding the future of Cell C.

Final word

The Drucker Institute, a unit of Claremont Graduate University, has produced a company ranking based on the principles of its founder, using data from a wide range of providers. The list includes US companies listed on the NYSE or Nasdaq and meets criteria related to their value and prominence. The ranking includes in its top 50:

1: Amazon.com

2: Microsoft

3: Apple

4: Alphabet

5: Cisco

6: Facebook

6: IBM

9: Intel

11: HP

17: Accenture

17: Adobe

19: Nvidia

20: Intuit

28: VMware

29: TI

38: Salesforce.com

43: Oracle

46: AT&T

47: eBay

48: Dell

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