Datatec seeks to unlock value

ICT group Datatec has acquired UK consultancy and advisory firm Q Associates, a move that will boost its footprint in the areas of higher education and government secured services. The group has been working on ways to unlock value from its existing structure, while investing in the growth of core businesses.

Infotech group Datatec has acquired UK consultancy and advisory firm Q Associates, a move that will boost its services footprint in the areas of higher education and government secured services.

The group has been working on ways to unlock value from its existing structure, while investing in the growth of its core businesses.

Datatec did not provide a figure on Monday for the acquisition, but implied it is less than 5% of its market value, or less than R478.5m.

Q Associates provides services involving data management, data protection, compliance and information security, Datatec said on Monday, and technology solutions to UK universities and research councils, government security services and commercial clients.

The company also holds advanced technical accreditations with many of the world’s leading technology vendors, including Microsoft, NetApp, Oracle, IBM and Rubrik.

“The acquisition of Q Associates will extend the reach and skills of Logicalis UK&I, underlining our commitment to grow and provide increased value to customers across all sectors, especially higher education and government secured services,” CEO Jens Montanana said in a statement.

UNDERLINING OUR COMMITMENT TO GROW AND PROVIDE INCREASED VALUE ESPECIALLY IN HIGHER EDUCATION AND GOVERNMENT Jens Montanana Datatec CEO

Established in 1986, Datatec’s operations span more than 50 countries. It has two main divisions: Logicalis and Westcon International (WI), which distribute security and networking technology products.

Like other companies in the sector, Datatec has reported benefits from the pandemic-era remote working trend, which forced many to rethink their digital infrastructure requirements, while it has also been looking to broaden its services.

In May, it announced it was acquiring space-focused consulting group Northern Sky Research, in a move that provides expertise in an area where 5G and satellite technologies are rapidly converging. The company did not provided a figure for that acquisition.

Datatec shares have lost much of their value over the years. They traded at R137 at the turn of the century and almost R77 in 2015. Much of the losses have been attributed to its international operations the bulk of its business which struggled to be profitable over the past decade, resulting in a series of corporate actions to slim down the group.

To deal with its valuation gap, Montanana assembled a team from Lazard, known as the world’s largest independent investment bank, to explore ways to unlock value. The company said it is considering all options, but a few on the table include separately listing Logicalis and WI or selling to a larger group, as Adapt IT did when it was taken over by Canada’s Volaris.

In line with that plan, Datatec said it has entered into the potential sale of its management consulting business, Analysys Mason, for R4bn.