Mergers, Acquisitions and Financial Results

Technology group Business Connexion has acted on its goal of becoming an internet service provider for the corporate market by acquiring Bidvest Network Solutions, a money-losing division of the Bidvest Group.

No value has been declared, but Business Connexion has earmarked up to R90m to buy the business and expand its network.

The move sees 82 Bidvest Network staff absorbed by Business Connexion, which will also take over its clients.

The division provides voice and data services for companies in the Bidvest stable and other corporate clients.

Now Business Connexion will use the network to offer voice, data and video services to its own clients as well, including major corporations such as Sasol and Edcon. That could generate significant new revenue, Business Connexion strategy executive Willem van Rensburg said yesterday.

When Business Connexion issued its annual results last week, CEO Peter Watt said the ability to offer voice, data and video communications was essential for its strategy of running information technology infrastructure for its customers on an outsourced basis.

Until now, it has been able to manage only the communications services that its customers run on networks leased from Telkom or a private provider such as Dimension Data. Now it can consolidate all that traffic onto its own network.

The Bidvest group published its results on Friday, showing that the Network Solutions division lost R6m after investing in its operations.

But the network improvements had made it a more attractive takeover target than some of the other internet service providers that Business Connexion had evaluated.