Seacom has confirmed its intention to acquire EOH Network Solutions (EOH-NS) and Hymax, divisions of iOCO and part of EOH Holdings Limited (EOH), at an enterprise value in transaction of R144.9-million.
According to a statement released by the company on SENS and to the media, EOH concluded agreements to divest of its Network Solutions business (‘EOH-NS’) conducted by EOH Mthombo Proprietary Limited, a wholly-owned subsidiary of EOH and of the entire issued share capital of Hymax (SA) Proprietary Limited (‘Hymax’), both of which, currently operate under the iOCO division, to Seacom South Africa Proprietary Limited or Seacom.
The statement continues that over the past two years, EOH has embarked on a targeted disposals strategy which includes assets that are capital intensive.
“In support of this and due to EOH’s current capital constraints, relative to the Mobile Network Operators (MNOs), and as the Group prioritises creating a fit-for-purpose capital structure, EOH has looked to ensure that EOH-NS and Hymax can continue investing in world-class infrastructure and maintain their service excellence.
It added, “Seacom’s position as a leading ICT and internet connectivity supplier for African enterprises as well as their stated strategic objective of strengthening its enterprise offering, provides a compelling opportunity for value unlock for EOH-NS and Hymax, both for existing and future clients and the transferring employees. The embedded relationships that exist between customers and other EOH business units will remain as is and the EOH Infrastructure Services business is positioned to benefit from the transaction as we leverage the Seacom connectivity expertise.”
The proceeds of the transaction, net of costs, will primarily be applied to reduce EOH debt further.
To date, an ‘Intention to Purchase’ agreement between Seacom and EOH has been signed and submitted to the Competition Commission for approval. The transaction will conclude once approval has been received
Oliver Fortuin, Group CEO at Seacom, said, “The acquisition of EOH-NS and Hymax forms part of Seacom’s ambitious growth strategy that will transform the business into a converged telecommunications provider across Africa.By expanding our on-net capabilities and reach with this acquisition and the acquisition of Hirani Telecom in Nairobi and Africell Uganda’s infrastructure, Seacom aims to provide customers with comprehensive enterprise-grade ICT solutions and quality connectivity.”
According to the companies, the combination of Seacom’s Tier 1 Global Network with EOH-NS’s managed services capability is a strong match, culminating in a complete ICT service offering with the potential to take local businesses to the next level of their digital transformation journey and enable synergistic opportunities.
Said Stephen van Coller, EOH Group CEO, “I believe that Seacom, as a leading ICT and internet connectivity supplier for African enterprises, will provide a compelling opportunity for value unlock for EOH-NS and Hymax both for existing and future clients and the transferring employees. The embedded relationships that exist between our customers and other EOH business units will remain as is and the EOH Infrastructure Services business is positioned to benefit from the transaction as we leverage the Seacom connectivity expertise.”
Fortuin added, “We are looking to the future and to creating end-to-end ICT solutions for enterprises. We aim to create a complete ICT offering that combines hosting, security, and network connectivity and is scalable enough to expand as our clients’ requirements change. This will be packaged by a high-touch team that offers each client a personal and tailored experience. Managed services form an important part of that goal, and with EOH-NS by our side, we are reaching for it.”
Van Coller told ITWeb Africa that South African customers can expect a more mature enterprise offering including managed services, Voice, and SD-WAN platforms and “this expertise will be applied across all Seacom’s markets, in time.”
He added that there are no immediate HR implications as the intention to acquire relies on Competition Commission approval.Based on the offering, Seacom intends to acquire the two organisations as going concerns, which includes the entire staff compliment.