DataPro: Tiscali SA’s price means higher ISP market value

DataPro Pty. Ltd., the soon-to-be-listed niche telco and Internet Service Provider (ISP), commented Tuesday that it is comfortable with the R324 million (US$48 million) acquisition of the ISP business of Tiscali South Africa (SA).

The price tag paid for Tiscali “places a higher strategic value on DataPro — and a higher valuation on the ISP market in general,” says James Herbst, director responsible for finance at DataPro.

Herbst says the purchase price of Tiscali from a price earnings perspective — which, at R324 million, prices Tiscali at a price earnings ratio that is well in excess of relative ratios in the market — creates a natural underpin to the overall industry.

“While some people might think that the R324 million price tag may be too high, we believe — on deeper analysis — that it is arguably a fair price, relative to the strategic value of Tiscali to the marketplace. The purchase price is not based on the traditional market principles of price earnings, but, rather, it seems, on revenue multiples. If DataPro is rerated on these more strategic principles, then our real and strategic value needs to be significantly re-assessed upwards,” he adds.

He says, however, that M-Web is going to have to work hard to gain business benefits from the acquisition, and needs to “sweat good returns out of Tiscali’s assets”. “Overall, this purchase shows the major consolidation that is taking place in the ISP sector, and places DataPro, as the only independent niche telco in the Internet service provision space, in a very strong position, and provides it with a lot of market allure. It is really good news for our listing and potential ongoing performance once we are listed,” he adds.

Last week DataPro, the biggest independent ISP, announced that it is to list on AltX, the alternative exchange — making it the only ISP to be listed in South Africa.

In terms of the planned listing, DataPro will initially list on the development board via a reverse listing into Casey Investment Holdings — which is presently a cash shell – and will, by October, move to AltX. Casey will be renamed DataPro Group.

There are currently 74,979,630 Casey shares in issue, with an undertaking to issue a further 154,000,000 shares — at 55c a share — to take the total number of issued shares to 228,979,630. Once listed, DataPro believes it will be in a strong position to consolidate a portion of the ISP market. This will be achieved by a number of acquisition possibilities and the market mechanism of AltX.

Would you recommend this article?

Share

Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.


Jim Love, Chief Content Officer, IT World Canada

Featured Download

Featured Articles

Empowering the hybrid workforce: how technology can build a better employee experience

Across the country, employees from organizations of all sizes expect flexibility...

What’s behind the best customer experience: How to make it real for your business

The best customer experience – the kind that builds businesses and...

Overcoming the obstacles to optimized operations

Network-driven optimization is a top priority for many Canadian business leaders...

Thriving amid Canada’s tech talent shortage

With today’s tight labour market, rising customer demands, fast-evolving cyber threats...

Staying protected and compliant in an evolving IT landscape

Canadian businesses have changed remarkably and quickly over the last few...

Related Tech News

Tech Jobs

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

Tech Companies Hiring Right Now