Published on the 14/08/2014 | Written by Beverley Head
The ranks of long established Australian listed technology companies continues to thin with a bid from South Africa based Dimension Data for IT services business Oakton…
Dimension Data, now owned by Japanese giant NTT, has offered Oakton shareholders AU$1.90 per share for 100 percent of the company – a 42.6 percent premium over the average weighted price during the last three months. The deal values the bid at around AU$ 171 million.
With over 1100 employees and offices across Australia plus a presence in Hyderabad, India, Oakton provides consulting, delivery and managed services to government and enterprise clients. Dimension Data by contrast has operations in 58 countries and employs 23,000 people.
On news of the bid, which has received the support of the Oakton board because of the value it will offer to shareholders, Oakton shares, which had been trading around $1.46 surged almost 29 percent to $1.885.
The takeover bid for the 25 year old Australian technology veteran follows a year-long strategic partnership between the two companies which saw Dimension Data bundle its ICT infrastructure integration, cloud and outsourcing services with Oakton’s portfolio.
According to Rodd Cunico, Dimension Data Australia CEO: “Dimension Data and Oakton have a complementary value proposition and footprint, and a strong cultural fit. The proposed acquisition will expand Dimension Data’s presence in Australia significantly. With stronger strategic IT consulting capabilities and our proven technology expertise, we’ll be able to provide the type of end-to-end solutions our clients are seeking. This is an exciting opportunity for Dimension Data, and one that I believe will position us as one of the leading IT solutions and services providers in Australia.”
While the merged future may look rosy to Dimension Data, Oakton has endured a period in the financial doldrums. For the most recent half year reported, to the end of December the company saw revenues fall 3.3% to $81 million, while net profits were down 9.5% to $4 million.
If shareholders and the Victorian Supreme Court agree to the proposal the takeover should be complete by the end of the year.
