Vodacom takes 51% of Stortech

Johannesburg, 22 Jan 2009

The Competition Tribunal has approved Vodacom taking a controlling stake in managed services business Storage Technology Services (Stortech). The value of the deal has not been disclosed by either company.

The tribunal ruled yesterday after the deal was unconditionally passed by the Competition Commission last week. Vodacom will now take 51% of the company, while Stortech`s own management will retain 18%, and 31% will stay in the hands of the company`s black empowerment partners.

This is the second Vodacom deal to be approved this month. Early in January, the company was given leave to buy a division of international infrastructure business Gateway, for $700 million.

Stortech is already a supplier to Vodacom. "As a subsidiary, Stortech will give Vodacom access to additional technical and engineering skills and will release synergies," noted Vodacom CEO Pieter Uys at the acquisition announcement last year.

The company also says the acquisition will help to diversify the business Vodacom offers, which is a strategy most of the telecoms providers are implementing this year. Uys noted that Stortech`s portfolio complements Vodacom Business`s enterprise solutions-focused division and will expand upon Vodacom`s data centre services capabilities.

Vodacom Business unveiled its new R100 million data centre last year. The centre hosts up to 20 000 client servers and 650 000 virtual machines.

The telco`s business division signed a multimillion-rand contract last week that will see large consulting, engineering and management business BKS Group host its systems at the new data centre.

Stortech CEO Tim Knowles said the company is looking forward to a productive relationship with Vodacom. "Stortech is delighted with the merger, and I am personally excited that my management and I will be staying onboard as part of a growing force in the ICT business services market."