MERGERS, ACQUISITIONS AND FINANCIAL RESULTS
BCS-NET BOUGHT OUT BY EMPOWERMENT CONSORTIUM
Network service provider BCS-Net, which was 82% held by liquidated Finstruct, has been bought by an empowerment consortium. The Finstruct group was placed under voluntary liquidation in December 2001, although BCS-Net continued trading profitably despite the uncertainty in shareholding.
BCS-Net, which says it is now the country’s largest black-owned IT infrastructure company, has also taken over the entire networking business of Siemens Business Services. The deal is estimated to be worth R60 million over five years.
While there were about five bids for the company, it was ultimately acquired by a consortium made up of Amava Technologies, Zonkizizwe and various individuals. Ismail Sali-Ameen, who worked at BCS-Net for 18 years before leaving in 2000, has been appointed CEO.
Sali-Ameen says a major factor in putting the consortium together was to change BCS-Net’s ownership profile. "It was a white-owned company, which closed new government business to us. Even though in management and technology expertise we complied with empowerment requirements, in ownership we did not," he says.
"The new ownership structure changes this and makes us the largest black-owned IT infrastructure company in SA. Our assets, our intellectual capital, our infrastructure are all our own, and we also have a name in the industry."
He says the Siemens Business Services partnership benefits the company as it brings on board about 180 virtual private network clients. In addition, the two companies provide complementary services.
Siemens Business Services had been looking for an appropriate empowerment partner where merit was a key factor.
BCS-Net is also actively pursuing other deals. Whereas 90% of revenue is generated in the private sector, it intends to put equal emphasis on the government and public sectors.
"There are some interesting deals in the pipeline which we cannot disclose as yet," Sali-Ameen says.