Telkom Offers to buy Business Connexion for R2.7 BillionConverged telecoms provider Telkom has offered to buy one of Africa's largest ICT service firms, Business Connexion (BCX) for R2.7 billion.
BCX is primarily a cloud-based services provider with over 7000 employees in office across Africa, the UK and Dubai. The IT company have successfully delivered industry-leading solutions to the financial services, academic, telecommunications, SMB, public sector as well as oil and gas sectors for over five years.
Telkcom offers voice and data services across fixed and mobile lines in South Africa. The company says it has approximately 3.7 million telephone access lines in service, and 183,880 ports connected via multi-service access node.
Both companies are listed on the Johannesburg Stock Exchange, so if the deal were to go through BCX's ordinary shares would be removed.
In a public announced by the two companies on the stock exchange Securities Exchange News Service (SENS), details how Telkom intends to make a cash offer to acquire the entire issued share capital of BCX at a premium price of R660 per share, according to IT Web Africa.
"A key consideration of our strategy is to grow beyond our core business of connectivity and expand into end-to end ICT services. This will form part of the strategy to improve performance and restore profitability," said Telkom Group's CEO, Sipho Maseko, in a press release.
More detailed rationale for the proposed transaction is listed by the companies' joint statement on SENS:
"The proposed transaction will address the technology and telecommunications needs
of South African companies, both within their domestic markets and as they expand
into other African countries and beyond the continent," reads the SENS announcement.
The announcement goes on further to say that "as major global technological changes are driving convergence of the information technology and telecommunications industries, the proposed transaction will advance the convergence strategies of both Telkom and BCX."