Vox rings up deal with Storm
October 10, 2007
By Nicole Rego
Johannesburg - Vox Telecom on Wednesday said it has entered into an agreement to acquire telephony services provider Storm for R360 million.
The acquisition will be part of Vox Telecom's strategy to improve its positioning in the VoIP telephony market and augment Vox's corporate customer base profile and market share.
"We continue to look for acquisitions that are strategic, accretive to earnings and allow us to improve our scale and strategic positioning in the South African telecommunications market," said Vox Telecom executive chairman Tony van Marken.
He added that Storm was in the company's "strike-zone" and is an excellent fit with Vox Telecom's existing businesses.
Van Marken said that the deal also offers "significant synergies once the businesses are integrated. Storm is a significant asset to add to the Group and will be a key contributor to future growth and earnings."
Vox intends to integrate Storm's telephony business into its 100% owned subsidiary Orion Telecom and the Internet business into its wholly owned subsidiaries responsible for corporate ISP services, DataPro and consumer ISP services, @lantic Internet Services.
"Storm is a major player in the voice and data markets, with a very strong VoIP platform and customer base," according to Vox Telecom CEO Douglas Reed, adding that they also bring VoIP skills that are complementary to Vox's.
"The acquisition strengthens our stated strategy of establishing Vox Telecom as the preferred telecommunications alternative to the domestic incumbents. It will considerably improve our position in the VoIP telephony market and augment our corporate customer base profile and market share," Reed said.
"This is a very positive development for Storm's customers as they will be able to still benefit from the current Storm services, but will have a further advantage from the economies of scale that the larger Vox Telecom group offers", said Willem van Rensburg, chief executive officer of Storm Telecom.
"There will be a seamless transition from a customer perspective, with the same products being supported by the merged entity, but they will also be able to take advantage of the other products and services available from Vox Telecom," added van Rensburg.
The R360-million deal will be funded through a combination of debt and equity financing and is still subject to approval by the Competition Commission and other regulatory bodies including the Reserve Bank and the JSE.
Vox Telecom was previously known as Datapro
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