On the Money – In Brief

Mergers, Acquisitions and Financial Results

-Dimension Data is ending its 23-year listing on the JSE on a high note.The IT group, which is being acquired by Japan’s Nippon Telegraph and Telephone (NTT) Corp, reported a 9,9% increase in sales in constant currency terms in the 2010 financial year to September. In the financial year, Didata recorded an 8,2% increase in operating profit, bringing it to $237,8m. Operating margin reached 5%, from 4,9% a year ago. The strong results will come as welcome news to NTT, which is acquiring the group in a R24bn all-cash deal.

- JSE-listed outsourcing specialist, the Dialogue Group, has sold its 51% stake in disaster recovery firm ContinuitySA for R35m.CoroCapital, the investment banking firm and subsidiary of Coronation, will take a 49% stake. ContinuitySA staff and management have acquired the other 2%.The deal is still subject to several conditions, including a due diligence investigation and approval from the JSE.Dialogue has faced difficult times in recent months, including the voluntary liquidation of its primary subsidiary, Dialogue SA.The group has also sold its 51% stake in call centre recruitment business Callforce.ContinuitySA CEO Allen Smith says the company has been in discussions with CoroCapital for some time.As part of the proposed transaction, the directors of ContinuitySA have agreed to declare a special dividend of R4m, payable to current shareholders. Of this amount, R2,04m will accrue to Dialogue based on its 51% ordinary shareholding.  

-Boston-based wireless communication site operator American Tower Corp has agreed to buy 3,200 cell towers from Cell C, South Africa’s third-largest cellco by subscribers. American Tower will buy 1,400 of Cell C’s existing towers and as many as 1,800 additional towers that are already under construction, or mooted for future development. Johannesburg-based Cell C will be the ‘anchor tenant’ for each tower. The sale is expected to pave the way for a more competitive wireless market, as it will allow smaller players to lease access to the national tower network at competitive rates. The transaction, which is worth a reported USD430 million, is expected to close in early 2011.

- Telecom Egypt (TE), posted relatively flat revenues in the nine months ended 30 September 2010, with the operating citing year-on-year growth in wholesale turnover, a seasonality effect affecting TE’s retail business, and an increased contribution from its internet unit TE Data as contributory factors. In 9M10 TE generated revenues of EGP7.79 billion (USD1.35 billion), up 0.7% year-on-year, with turnover from retail services accounting for just over half of that, EGP4.04 billion, down 11% when compared to the same period a year earlier. Wholesale revenues however, helped to offset a significant portion of the lower retail revenues, climbing 17% in the year to reach EGP3.75 billion. Earnings before interest, tax, depreciation and amortisation (EBITDA) stood at EGP3.99 billion, down 4% Net income for the nine-month period was EGP2.73 billion, up 6% against 9M09.

- Kenyan telecoms firm Safaricom has reported revenues of KES47.1 billion (USD560.2 million) for the six months ended 30 September 2010. It’s a rise of 15.9% compared to the KES40.66 billion reported in the same period a year earlier. Meanwhile, EBITDA increased 13.8% to KES18.8 billion, and net profit climbed to KES7.63 billion, a rise of 15.1%. Data services provided 23.8% of the total.

-Egypt's Orascom Telecom will not go ahead with a planned initial public offering (IPO) at subsidiary Telecel Zimbabwe until after the outcome of a proposed merger deal between Orascom and Russia's Vimpelcom.In June the GSM operator, 60% controlled by Orascom’s wholly owned Telecel Globe unit, submitted its proposals to the Zimbabwean government to reduce foreign shareholding to 49% to comply with indigenisation legislation, committing to issue new shares on the local stock market. Vimpelcom agreed last month to buy a controlling stake in Orascom from Egyptian billionaire Naguib Sawiris, but the deal has been complicated by the Algerian government pressing to nationalise Orascom's unit there.

-Botswana Telecommunications Corporation (BTC), has posted net profit of BWP181 million (USD21.1 million) for its fiscal year ended 31 March 2010, an increase of 52.2% on the previous year. The figure represents the wholly state-owned company’s highest net profit in ten years. BTC’s turnover for the year to end-March 2010 rose 14.7% year-on-year to BWP958.4 million. Voice calls generated sales of BWP383.4 million, or 40% of total revenues for the year, growing 1.9% from the previous year, while data services revenue rose from BWP249.9 million in the year ended 31 March 2009 to around BWP400 million a year later. BTC said that it invested a total of BWP313.8 million in the year to 31 March 2010.