EOH sells off networking business to Seacom

JSE-listed EOH is selling its Network Solutions (EOH-NS) and Hymax businesses to Seacom in a R144.9 million deal.

The technology group says proceeds of the sale will primarily be applied to reduce its debt, which it has been servicing in the last 18 months through asset disposals.

EOH-NS and Hymax deliver wholesale and managed service solutions for the networking and voice segments of the telecommunications industry.

The company says the entities are also strategic and essential partners to a variety of enterprise clients covering multiple verticals across the private and public sectors.

The transaction with Seacom is the latest to be sealed by EOH in recent weeks, as it continues to pay off its debt.

Last month, EOH disposed of 100% of its shares in its Information Services business to Bachique 842 for the base purchase price of R417 million. The deal, which is subject to EOH shareholder approval, is also meant to improve EOH’s liquidity and reduce debt.

Commenting on the transaction with Seacom, Stephen van Coller, EOH group CEO, says: “EOH has embarked on a targeted disposals strategy, which includes assets that are capital-intensive.

“In support of this and due to EOH’s current capital constraints, relative to the mobile network operators, and as the group prioritises creating a fit-for-purpose capital structure, we have looked to ensure EOH-NS and Hymax can continue investing in world-class infrastructure and maintain their service excellence.

“I believe that Seacom, as a leading ICT and internet connectivity supplier for African enterprises, will provide a compelling opportunity for value-unlock for EOH-NS and Hymax, both for existing and future clients, and the transferring employees.

“The embedded relationships that exist between our customers and other EOH business units will remain as is and the EOH Infrastructure Services business is positioned to benefit from the transaction as we leverage the Seacom connectivity expertise.”

For Seacom, the acquisition of EOH-NS and Hymax forms part of the company’s ambitious growth strategy that it says will transform the business into a converged telecommunications provider across Africa.

“By expanding our on-net capabilities and reach with this acquisition and the acquisition of Hirani Telecom in Nairobi and Africell Uganda’s infrastructure, Seacom aims to provide customers with comprehensive enterprise-grade ICT solutions and quality connectivity,” says Oliver Fortuin, group CEO of Seacom.