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NTT buys DiData for £2.1bn

Alex Scroxton

Japanese communications firm NTT has put £2.1bn on the table in an all-cash offer for Cisco powerhouse Dimension Data.

The offer, which represents an 18% premium on DiData's most recent closing price, has already been agreed unanimously and recommended by both Boards of Directors. It provides for NTT to take control of 100% of DiData's share capital at approximately 120p per share.

In a statement released this morning, NTT said the two firms complemented each other "in a fitting way" with minimal overlap between their services arms; DiData specialises mainly on the development, operation and maintenance of IT infrastructure, whereas NTT has built its business around managed network services, data centres and mobility.

Geographic synergies between the two companies will enable the development of a "one-stop" ICT services provider, it claimed.

DiData executive chairman Jeremy Ord added: "The combined companies will hold a strong competitive position serving global corporations moving to managed infrastructure services and cloud computing."

He added: "We believe our alliance with NTT will now allow Dimension Data to accelerate the execution of our medium and long-term strategy at a rapid pace."

NTT expects to complete the process by the end of October.

In its H1 financial results, released back in May, DiData made sales of approximately £1.44bn and grew net profits by 4% on the year-ago-period.

At the time CEO Brett Dawson said he was beginning to see clear signs of recovery in the market, and vowed to ramp up investment in resources to meet growing market demand and accelerate the firm's services strategy.

DiData had previously been the subject of unconfirmed acquisition rumours, with Vodafone mooted as a possible buyer. However, reflecting on this morning's annoucement, analyst Anthony Miller at TechMarketViews said he struggled to understand why it should want to sell up a this point in time.

"Brett Dawson has done an amazing job in turning round a highly fragmented network product reseller into a global giant. His strategy seemed sound, profitability was improving ... what's the problem?" he said.

Further details of the acquisition are to follow later today, NTT and DiData said.


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