Subscribe
About

DataPro bids for Orion

JSE-listed telecommunications company DataPro wants to buy Orion Telecom for R380 million.

DataPro executive director Tony van Marken says the company is now well on its way to becoming an "alternative independent telecommunications operator that offers a comprehensive portfolio of voice and data".

The proposed acquisition will allow DataPro, which offers voice over Internet Protocol (VOIP), least-cost routing and data services in southern Africa, to achieve a scale it says is not otherwise easy to achieve.

In addition, the new company - which will release its full-year results on Monday - will have a more diversified financial portfolio, which will unlock further growth opportunities in voice and data.

It will also have access to a service provision agreement with MTN, and dealer agreements with Vodacom, Cell C and Transtel. DataPro already has interconnect agreements with Telkom and Vodacom.

DataPro has completed five deals in 12 months and has a "good deal flow" ahead of it, he says.

This "landmark" deal, says Van Marken, gives the company the opportunity to offer a truly converged platform, in response to market requests, without the huge investment of developing complementary technologies.

Big ambitions

The purchase, effective from the beginning of next month, is in line with DataPro's vision to "be the leading independent alternative supplier of voice and data services in SA", it says in a statement to shareholders this morning.

Orion sales and marketing director Jacques du Toit says the new company will now be a truly converged single service provider, able to offer corporations a one-stop solution.

Orion, which provides least-cost routing and VOIP, will immediately have access to a new range of products and services without having to develop them. He says the acquisition speeds up the process of convergence.

The new company will offer integrated voice and data off well-proven platforms, he says. "For any competitor to try and catch up now will be very difficult."

DataPro says it will buy out Orion through a combination of cash and shares. Mogala Investments currently owns the majority stake of 56.061%, Arch Equity Telecom Holdings owns 30.789% and Orion's management owns 13.15%.

Orion reported revenue of R680 million for the year ended February and saw net income of about R47 million. It generates nearly R60 million in cash each year.

The deal is expected to add at least R60 million a month to DataPro's existing monthly annuity revenue, but is still subject to several conditions.

Related stories:
DataPro expands
DataPro expects higher earnings
DataPro takes on Telkom
DataPro completes telecoms acquisition
Portability could hit LCR

Share