Datatec buys space consultant Northern Sky Research

ICT group Datatec has acquired space-focused consulting group Northern Sky Research, in a move that broadens its expertise in an area where 5G and satellite technologies are rapidly converging.

Having evolved over the past 35 years, Datatec — the operations of which span more than 50 countries — has two main divisions: Logicalis and Westcon International (WI), which distributes security and networking technology products.

Valued at R8.58bn, Datatec is one of the JSE’s largest information and communications technology (ICT) services companies. 

The group did not give a price for the acquisition by its subsidiary, Analysys Mason, on Tuesday, implying it was less than 5% of the group's market value, or less than R426m.

Northern Sky analyses growth opportunities across four core industry sectors: satellite communications, satellite and space applications, financial analysis, and satellite and space infrastructure, the group said.

Datatec has been working to beef up its expertise and assets in new technologies such as 5G, in recent years. 

“5G and satellite technologies are converging rapidly with disruptive effects on investment models,” CEO Jens Montanana said in a statement.

“The acquisition of Northern Sky Research, with its unrivalled satellite and space expertise, is therefore very timely and puts Analysys Mason in a unique position to advise its clients on these important developments,” he said.

In 2021, Datatec acquired Siticom, a Germany company that provides 5G infrastructure, through its Logicalis unit, in a deal worth more than $20m. 

As 5G (the fifth generation of mobile technology) has begun to take off worldwide, technology firms are increasingly looking to have their own infrastructure in place to help client systems and data centres communicate as quickly as possible, driven by the growth in cloud computing.

With the latest deal now sealed, Datatec says the combination of Northern Sky Research’s “industry leading knowledge and expertise, and Analysys Mason’s strong international market position in the TMT [technology, media and telecommunications] sector, will expand the breadth of Analysys Mason’s services to new and existing clients worldwide, underpinned by a unique knowledge base spanning 5G, fibre and satellite platforms.”

Established in 1986, Datatec had net debt of $152.5m (R2.45bn) at the end of its six months to end-August, and cash resources of $492.7m.

The group’s managing consulting subsidiary, Analysys Mason, has been seeking to increasingly specialise in areas where telecommunications and IT are converging, referring to a trend where previously separate technologies become more integrated.

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