Synergy Capital, the Mauritius-domiciled private equity fund that focuses on West Africa investments, has acquired the Nigerian and Ghanaian subsidiaries of technology company Dimension Data in a deal whose terms were not disclosed. The purchase is the 10th investment Synergy is making with its $100 million maiden fund.
Dimension Data is based in Johannesburg, with a turnover of USD 7.4 billion and offices in 49 countries, is a member of the Japan-based NTT group, the world’s largest colocation provider that owns more than 12.5 million square feet of gross data center spaces as at 2015.
The Nigerian and Ghanaian business concerns of Dimension data will now be called Cloud Exchange Limited in a brief transitional period; the company will provide IT systems integration services to large corporations and government entities across West Africa.
“Our deep understanding of the region together with the Dimension Data and NTT’s technological capabilities will unlock value for our clients,” said Akintoye Akindele, Partner at Synergy Capital. “Our ability to anticipate and adapt to technological changes has been the drive for this partnership and acquisition.”
The Economist Intelligence Unit’s ‘Building a digital Nigeria’, a report published last year, said that digital technology is helping to drive growth in promising non-oil sectors in Nigeria, from media and entertainment to finance and fast-moving consumer goods.
The report said that digital technology could play an enabling role in increasing access to government services like health and education, improving financial inclusion through mobile money, and helping businesses overcome infrastructure deficits.
Nigeria is connected to the Internet by 5 submarine cables, all of which land in Lagos,11 providing upwards of 11 terabytes of bandwidth per second, much higher than many other West African countries, although only between 10 and 20% of this capacity is actually used. This gap reflects the lack of necessary surrounding digital infrastructures like fibre optic cable and base transceiver stations (BTS).
Despite leaving Dimension Data’s family of businesses, Cloud Exchange will remain the company’s exclusive partner in both Nigeria and Ghana, providing technical partner services and technology and support to the new entity.
The transaction adds a third ICT asset to Synergy Private Equity Fund’s (SPEF) portfolio, and the new company plans to expand its footprint more broadly across the region by adding virtual computing services with local points of presence in Côte d’Ivoire, Liberia and Sierra Leone.
The London office of Orrick, an international law firm, assisted Synergy with the legal due diligence for the transaction; PWC Nigeria provided financial due diligence services for the deal.
INNOCENT UNAH
