Convergence gets green light to complete Datacentrix buyout

Competition authorities have greenlit a deal that sees Andile Ngcaba’s Convergence Partners acquire 100% of Datacentrix Group from former JSE-listed technology group Alviva.

In January, the firm said it had agreed to make the acquisition through its Convergence Partners Digital Infrastructure Fund in partnership with the existing Datacentrix management team, which has led the company for more than 20 years.

The agreement was subject to the fulfilment of conditions and regulatory approval.

On Wednesday, Datacentrix announced that all conditions precedent had been met, with the Competition Commission and regulator the Independent Communications Authority of SA (Icasa) having unconditionally approved the transaction.

Founded by Ngcaba, who serves as chair, Convergence Partners specialises in digital infrastructure investments, raising $296m (R5.6bn) for its third fund in January. This was being earmarked for opportunities across Sub-Saharan Africa.

In total, the firm has more than $600m under management.

Datacentrix is a hybrid information and communication technology systems integrator and managed services provider that competes with NTT Data, formerly Dimension Data, and Telkom’s BCX for business in the public and private sector. It has a footprint on the Africa continent and in the Middle East. 

Datacentrix will continue to operate independently as it has in the past. 

Alviva is said to be exiting Datacentrix after its delisting from the JSE in early 2023, “to concentrate on its core hardware distribution operations”.

“I am thrilled to welcome Convergence Partners to our family and look forward to working with the team to create exceptional business outcomes and to pave the way for a sustainable future,” said Ahmed Mahomed, group CEO at Datacentrix. 

Ngcaba said: “We are delighted to be part of Datacentrix, one of the leading system integrators in SA. We are excited to embark on this journey towards artificial intelligence with Datacentrix. We are entering Datacentrix at a time when the market is transitioning towards an AI-driven enterprise, telco and public sector. With Datacentrix’s strong partnerships with leading global OEMs [original equipment manufacturers] we will be forging new partnerships as the market consolidates.”

The former communications department director-general and his team have been busy in recent years allocating capital to a number of projects. 

In November, Convergence Partners increased its stake in African broadband infrastructure business CSquared, buying shares previously held by Google.

In April 2023, it announced that it had invested $10m in 42 Markets Group, an incubator, investor and builder of fintech companies.

gavazam@businesslive.co.za