NTT buys Dimension Data for €2.5b

NTT is to buy South African IT firm Dimension Data for £2.1 billion (€2.5 billion) with the aim of offering “one-stop” ICT services to businesses worldwide.
The New York-listed Japanese carrier has offered an 18% premium in cash for the systems integrator, which it said has complementary geographic and product footprints that would help it boost revenue from value-added services for enterprises.
Dimension Data, which is listed on the London Stock Exchange and has 6,000 clients in 49 countries, would continue to operate as a standalone entity, NTT said.
“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. Dimension Data and NTT share the common vision to create new services and values to succeed in the coming age of cloud computing,” NTT CEO Satoshi Miura said.
FT columnist Lex said the equity price represented 22 times next year’s consensus forecast earnings for Dimension Data and was a 50% premium based on the average six-month close.
The deal was “generous for an acquisition that offers no synergies,” it said, noting that Dimension’s operating margin was just half that of NTT’s.