NTT Bids $3.2 Billion for Dimension Data

Telecom giant gains 6,000 new customers, plans for cloud computing services.

Nippon Telegraph and Telephone Corp. (NTT) said it will acquire Dimension Data Holdings Plc, a $4 billion provider of IT solutions and services, for some $3.2 billion in cash, a move the telecommunications giant said will pay immediate dividends with 6,000 new clients and a presence in the cloud computing market.

NTT said that the Dimension acquisition eases its move into cloud computing, a foray it plans to back with significant investments in research and development, mobile services and applications.

The parties said that the boards of directors of both companies have accepted the deal. NTT said that it expects the acquisition will close by the end of October 2010 and that Dimension will operate as a wholly-owned subsidiary.

“Our operational processes, brands, and methodologies will all remain,” said Brett Dawson, Dimension chief executive.

NTT said that it will fund the transaction from existing cash and money borrowed from the Bank of Tokyo-Mitsubishi UFJ Ltd. It said it will disclose the effect of the acquisition on its performance for this fiscal year ending March 31, 2011, when the deal closes.

Dimension, headquartered in London and Johannesburg, South Africa, and publicly traded on the London and Johannesburg stock exchanges, posted sales of $2.16 billion for the six-month period ended March 31, 2010, an 11 percent jump over the prior year’s comparable period.

Dimension is a leading partner of prominent vendors IBM Corp. and Cisco Systems Inc. The solution provider is a Cisco Gold Partner, maintaining a 19-year relationship with the vendor and earning its Global Enterprise Partner of the Year award in 2006 and 2007.

Satoshi Miura, NTT president and chief executive, said that the acquisition will move the telecom company toward cloud computing solutions and services.

“By leveraging the complementary strengths of both companies, we are confident that we will provide end-to-end, global-one-stop and high quality ICT services,” Miura said in a statement.

“Dimension Data and NTT share the common vision to create new services and values to succeed in the coming age of cloud computing,” Miura said.

Jeremy Ord, Dimension executive chairman, said that the “combined companies will hold a strong competitive position serving global corporations moving to managed infrastructure services and cloud computing.”

Carrier details complementary fit of two companies

NTT said that the complementary nature of its and Dimension’s business enhanced the value of the transaction. Specifically, NTT pointed to the absence of overlap between its focus on managed network services, data centers, system integration and mobile services and Dimension’s concentration on IT infrastructure operations and services.

In addition, NTT said that Dimension’s geographic coverage extends to Africa, the Middle East and Australia, areas where the carrier does not reach. NTT also said that it would benefit from adding Dimension’s locally-based clients to its customer list.

NTT maintains a client base of approximately 3,000 global multinational clients while Dimension holds relationships with about 60 percent of enterprises ranked in the Fortune Global 500 listing, officials said.

TAGS: cloud computing,IT services,telecommunications,NTT,Dimension Data

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