Nicola Mawson
Convergence Partners has bought a majority stake in IT company Datacentrix for an undisclosed amount, in a bid to leverage assets across both companies to take advantage of the huge possibilities that artificial intelligence (AI) is to offer.
As part of a management buyout which will see existing management remaining to continue leading the company, management and Convergence Partners bought the company out from private equity firm, Alviva.
Alviva acquired Datacentrix in 2017, resulting in the company being delisted after nearly 20 years on the bourse.
The deal was initially announced on January 17 this year, and yesterday achieved unconditional approval from both the Competition Commission and Independent Communications Authority of South Africa.
Ngcaba is the founder of Convergence Partners and is former director-general of what used to be the Department of Communications from 1994 to 2003.
He told Business Report yesterday that Datacentrix being in the top three hybrid ICT systems integrator and managed services providers in South Africa was an ideal fit for Convergence Partners, as it would allow both companies to grow by leveraging their respective capabilities and investments.
Convergence Partners has investments in entities as diverse as undersea cable Seacom through to Intelsat New Dawn.
Ngcaba noted that there was already interest among Convergence Partners’s investment partners that have operations across the continent to be connected to Datacentrix to allow for cross-pollination of offerings.
“We would like to take some Datacentrix products to sell to Ghana, Nigeria, and Kenya,” he said.
At the same time Datacentrix will have access to Convergence Partners’s current market in Africa, allowing it to expand growth in a different way from just following its South African clients to Africa in this “new chapter”, CEO Ahmed Mahomed told Business Report.
“Datacentrix’s roots are firmly planted in South Africa and it has ambitions to continue expanding its reach further into the continent and beyond,” he said.
Datacentrix which also has clients in the Middle East in countries such as Qatar will enable companies to take full advantage of AI in conjunction with Convergence Partners through offering infrastructure such as datacentres and infrastructure that are geared towards this rapidly-growing technology.
Ngcaba added that Datacentrix also had strong relationships with original equipment manufacturers in the hardware space such as HP, which was a distinct advantage as these companies are leaders in developing cloud platforms.
“I’m very excited. Among all shareholders there is a set of objectives and there is a clear vision that we all support and are working towards,” Ngcaba said.
Mahomed said the company has seen exponential growth over the past few years and he anticipated this continuing.
Datacentrix will continue to be led by its current management team which has successfully managed the company for many years, both in a listed and unlisted environment.
Ngcaba added: “It’s all about ensuring that the management of the business and the leadership of the business have skin in the game so that we all work together in the same direction in the same strategy.”
BUSINESS REPORT