Paracon Holdings has acquired IT contracting company Dimension DataSilverLine, while Dimension Data has acquired 25% of Paracon.
The R67.6 million SilverLine acquisition will be settled by the issue of 51.9 million Paracon shares, giving Dimension Data an initial 12.5% stake in Paracon, to be increased later.
"Dimension Data`s stake in Paracon is of strategic importance for our group as Paracon will now become the provider of choice for Dimension Data`s i-Commerce services locally and the preferred provider to the Dimension Data Group," says Paracon CEO Mark Jurgens.
"The SilverLine acquisition provides an excellent fit with our core IT services division and we believe that our expertise and competencies in IT resourcing will add significant value to SilverLine."
Paracon says its core business is in the IT services division, and SilverLine fits well within this division.
It adds that it will gain access to a larger client base, and its own expertise in IT resourcing will add significant value to the SilverLine business.
Dimension Data will appoint two non-executive members to the Paracon board, while SilverLine MD Janette Cummings will be appointed an executive director of Paracon.
Had the deal been effective on 1 January, Paracon`s headline earnings per share for the year to 30 June 2000 would have been 5% lower at 4.1c, while tangible net asset value on 30 June would have been 15% higher at 27.2c a share.
The net asset value per share, including intangibles, would have been 60% higher at 41.6c.
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