Dimension Data acquires SecureData Group [updated]

Dimension Data has signed a heads of agreement to acquire Aussie integrator SecureData Group's (SDG) business and its controlling interest in SQL Services.

In a statement issued Friday morning, DiData said the decision to acquire SecureData was based on "a high degree of strategic fit" with the integrator's local and global data centre solutions (DCS) business.

The acquisition would not involve the purchase of SDG's former subsidiary DataBank, which would continue to trade independently, Dimension Data said.

Dimension Data would take around 80 or half of SDG's staff, according to Evan Penn, MD at SDG. Around 20 staff would be let go and others would be re-deployed into other parts of the business, Penn said, adding that there was some crossover in administration positions.

He admitted that as a "mid-tier" system integrator, it was a difficult marketplace, competition was strong and there was a big margin squeeze, hence the decision to sell to a larger player. "Inside Dimension Data we have a propensity to capitalise of the intellectual property we've built over the years.

"There's a lot of brains-trust within the SecureData business which can be deployed within the Dimension Data framework," he said.

He said there were "clear synergies" between the two organisations. "Our customers will benefit by having access to Dimension Data's broader range of capabilities while our partners see this acquisition as having a significant degree of strategic fit between the organisations."

Steve Nola, CEO of Dimension Data Australia, told CRN SecureData had a strong brand and reputation in the storage market and felt this business would compliment the integrator's storage practice.

He didn't discount the possibility of further acquisitions in the future. "As an organisation, we're always looking at opportunities in the marketplace," he said.

While storage was a growing part  of Dimension Data's business, other markets such as security, call centres and speech recognition were also strong for the integrator, he said.

Penn and other SecureData managers would join Dimension Data an the SecureData name would disappear, Nola said.

SecureData Group did around $50 million in revenue last financial year and acquired its 51 percent stake in SQL Services in November last year.

This week, Dimension Data Australia reported an operating profit of US$14 million for its year ending 30 September, tipping further years of consolidation for the system integration market.

The local subsidiary of the global integrator also reported sales revenue for 2004 of US$481 million year on year, a 16 percent jump on 2003.