Dimension Data's Advanced Infrastructure Business Undergoes Management Buyout

In a significant move showcasing corporate restructuring and empowerment efforts, South Africa's Competition Commission has officially approved a management buyout of Dimension Data’s advanced infrastructure division. This approval follows on the heels of another Dimension Data affiliate in Ghana undergoing a similar management-led acquisition, indicating a broader trend within the conglomerate's strategy to refocus and empower local management.

The official nod was provided for African Business Expansion and Consulting (ABEC) to take over the Dimension Data Advanced Infrastructure, bringing the business unit under the control of its own management team. This business specializes in producing communications and related equipment, a sector that is becoming increasingly competitive as demand for advanced technology solutions continues to rise.

This restructuring is part of a deliberate strategy by Dimension Data to divest from what it regards as non-core segments of its expansive portfolio. One notable transaction attesting to this strategy was the sale of MWeb, a major internet service provider in South Africa, to WebAfrica.

As outlined by the Competition Commission, a central element of the buyout is the establishment of an employee share ownership plan aimed at benefitting qualifying workers, and the implementation of an ownership scheme for Historically Disadvantaged Persons (HDP). Continuing the group's commitment to social empowerment, the merging companies have agreed to maintain current initiatives supporting HDP operators and SMMEs.

Earlier this year, Dimension Data's Ghana operation was sold to Yvette Adounvo Atekpe, illustrating the company's ongoing efforts to decentralize and empower local leadership. Atekpe, a 16-year veteran of the company, is set to rebrand the operation beginning April 1st.

Concurrently, the conglomerate's Japan-based parent company Nippon Telegraph & Telephone (NTT) is preparing for a significant regional rebranding initiative that will see Dimension Data rebranded as NTT. This is part of NTT’s broader investment strategy to reinforce its presence in the Johannesburg-based IT company, as reported in May 2021.

This buyout is the latest in a series of strategic moves by Dimension Data. Three years prior, the company saw a major rebranding effort, consolidating various sub-brands to minimize duplication and present a unified market presence. Dimension Data, co-founded by Jeremy Ord in 1983, represents a sizeable portion of NTT’s revenues and boasts a significant workforce across multiple countries in the region, with South Africa being the dominant market.

Despite the successful navigation of the dot-com bubble and substantial growth thereafter, the firm experienced several rocky years, including a contentious legal battle with former chairperson Andile Ngcaba and a period marked by executive instability. Most strikingly, the company recently found itself entangled in legal proceedings related to the sale of its head office, which involved allegations of unethical conduct among former executives.

The recent buyout is an indication of Dimension Data's continual drive to reshape its operations, invest in its employees and reaffirm its commitment to broad-based empowerment principles.