Convergence Partners acquires SA's Datacentrix

South African private equity firm Convergence Partners has announced that its Convergence Partners Digital Infrastructure Fund (CPDIF) has signed an agreement with Alviva Holdings to buy 100% of IT services group Datacentrix.

In a statement, Convergence Partners explained that the acquisition was made alongside the existing Datacentrix management team that led the company for over 20 years.

Following its delisting from the Johannesburg Stock Exchange (JSE) in early 2023, Alviva is exiting Datacentrix to focus on its core operations in hardware distribution.

"The transaction aligns with the CPDIF's strategy of investing in high growth companies that are leading champions in their field with strong management teams and deep customer and vendor relationships," the statement continued.

Why Datacentrix fits

Convergence Partners said Datacentrix provides ICT integration services and solutions to the public sector and blue-chip corporates in South Africa, ensuring their success and sustainability in the digital age.

"Datacentrix offers deeply specialized skills and is endorsed by the world's foremost technology partners," the statement added.

Moreover, the IT services group is recognized for its agility, in-depth industry knowledge, proven capability, and strong overall performance.

"Datacentrix will continue to focus on expanding into technologies that deliver business value to its clients, including digital transformation solutions, hybrid solutions from edge to cloud that are informed by the customers' data and workload requirements," the statement continued.

Convergence Partners said that Datacentrix will continue to operate independently as it has in the past and does not envision any changes in operations or staff.

"By joining forces with Convergence Partners, we will harness what has made us successful to date and leverage the wider capabilities of the group including its reach into the rest of Africa," explained Datacentrix Group CEO Ahmed Mahomed.

Convergence Partners' recent transactions

The Datacentrix acquisition follows Convergence Partners' successful closing of its CPDIF at US$296 million, surpassing its initial target by over 18%. This is Convergence's sixth acquisition in the past year.

Convergence Partners chairman Andile Ngcaba speaking at the ITU's Partner2Connect Digital Development Roundtable in June 2022 in Kigali, Rwanda. (Source: ITU Pictures on Flickr via CC ShareAlike 2.0 Generic.)

Convergence Partners chairman Andile Ngcaba said central to Datacentrix's success is its people – from the staff to the leadership team, they represent the company's greatest asset.

"It is through [the team's] collective expertise and commitment that we envision growing the business to new heights, furthering our impact in the digital infrastructure landscape," Ngcaba explained.

The Datacentrix transaction is expected to close by the end of March 2024, subject to regulatory approvals from the Competition Commission and local regulator The Independent Communications Authority of South Africa (ICASA).

*Top image source: Image by pch.vector on Freepik.

— Matshepo Sehloho, Associate Editor, Connecting Africa