12 September 2008
South African multinational information communications technology (ICT) company Datatec has acquired a 50.01% stake in Inflow Technologies, an Indian ICT distribution business, giving the group a foothold in the rapidly growing south Asian country.
“India is a very large and fast-growing market offering strong prospects in our sector, with a lower cost of entry compared to many other developing markets and potentially higher returns and greater organic investment opportunities,” Datatec CDO Jens Montanana said in a statement this week.
Inflow Technologies is a value-added distributor focusing on technology enablement and distribution of security, storage and networking products, solutions and services. The firm has alliances with 22 global technology vendors, including CheckPoint, Nokia, McAfee Ironport, Websense, Radware, NetApp and Quantum.
“Our investment in Inflow is another important step in our international strategy to increase our exposure to the world’s major emerging markets which has recently seen our presence grow in markets such as Africa, the Middle East, Turkey and Brazil,” Montanana said.
The Indian company has a presence in nine key Indian cities and employs over 130 people, earning revenues of US$32-million in the last financial year. The company also has operations in Sri Lanka and Singapore.
The purchase will also provide Datatec, headquartered in Sandton, with a platform to add additional vendors and strengthen their Westcon subsidiary.
Westcon is a global distributor of advanced networking and communications convergence products from vendors such as Cisco, Nortel, Avaya, Checkpoint and Nokia in North and South America, Europe and the Asia Pacific region, and contributes some 71% of the earnings of Datatec, which is listed on the JSE as well as AIM in London.
The remaining 49.99% of Inflow Technologies will continue to be held by management and other existing shareholders.
“This investment, along with access to global best practices of Datatec in value added distribution, gives us greater ability to grow our market share, make alliances with new technology vendors and expand into new geographies,” said Inflow Technologies CEO Byiu Pillai.
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