SEACOM, EOH get regulator’s nod on acquisition
1 September 2022 earmarked as the first day of operations under the SEACOM banner.
South Africa’s Competition Commission has given the all-clear to pan-African telecommunications provider SEACOM to acquire EHO Networks Solutions (EOH-NS) and Hymax, divisions of iOCO and part of EOH Holdings Limited (EOH).
SEACOM said it will proceed with its current integration plans and the company has earmarked 1 September 2022 as the first day of operations under the SEACOM banner.
SEACOM first announced its plans to acquire EOH-NS and Hymax in April 2022, with an ‘Intention to Purchase’ agreement signed between the companies and sent to the Competition Commission for approval.
A statement released by EOH Holdings in April offered some detail about the rationale behind the transaction.
It reads: “Over the past two years, EOH has embarked on a targeted disposals strategy which includes assets that are capital intensive.
In support of this and due to EOH’s current capital constraints, relative to the Mobile Network Operators (MNOs), and as the Group prioritises creating a fit-for-purpose capital structure, EOH has looked to ensure that EOH-NS and Hymax can continue investing in world-class infrastructure and maintain their service excellence.
SEACOM’s position as a leading ICT and internet connectivity supplier for African enterprises as well as their stated strategic objective of strengthening its enterprise offering, provides a compelling opportunity for value unlock for EOH-NS and Hymax, both for existing and future clients and the transferring employees.
The embedded relationships that exist between customers and other EOH business units will remain as is and the EOH Infrastructure Services business is positioned to benefit from the transaction as we leverage the SEACOM connectivity expertise.
According to EOH, the proceeds of the transaction, net of costs, will be used primarily to reduce EOH debt.
Joe Vipond, SEACOM Group Business Development Officer responsible for mergers and acquisitions, said, “Following a brief and satisfactory application process, we are happy with the Commission’s decision and are looking forward to the next stage of this process.”
Founded in 2003 and acquired by EOH in 2010, EOH-NS specialises in the deployment of managed service networks and offering a wide range of cloud, security, and networking components.
Stephen van Coller, EOH Group CEO, said, “We are extremely pleased that the Competition Commission has approved this deal with no conditions. The conclusion of this deal enables the EOH Group to continue on its journey of creating a fit-for-purpose capital structure. We are also excited for the many prospects that EOH-NS and Hymax can target as part of the SEACOM Group.”
Vipond added, “What sits at the heart of this consolidation is people -partnering with organisations that offer different skill sets while continuing to offer essential and quality services to new and existing customers is central to what we want to achieve in the long term. Our clients and staff are all set to benefit from a combined, comprehensive service offering and shared values that take enterprise Internet solutions in Africa to the next level.”
“The next step is to finalise an organisational structure that makes the most of the acquisition, as well as helps to unlock SEACOM’s ambitious growth strategy for South Africa and beyond.”
Oliver Fortuin, CEO at SEACOM, said, “The synergies that were identified between the two companies were just too great to ignore. SEACOM has a heritage of bringing the Internet to South and East Africa and holds a strong position in the wholesale market as the ‘provider of providers’. We are relatively new in the enterprise space. Still, we have made great inroads in connecting some of South Africa’s top enterprise organisations through our dedication to providing network stability and reliability. EOH-NS and Hymax bring additional enterprise capabilities and managed services components that expand our on-net capabilities and reach, enhancing our ability to provide customers with comprehensive enterprise-grade ICT solutions and quality connectivity. This is a winning combination that allows SEACOM to expand and continue to grow our enterprise services business across the continent.”