T-Systems SA will double its turnover and staff complement as a result of its acquisition of IT company Arivia.kom from state-owned enterprises Eskom and Transnet.
That’s the word from T-Systems SA MD Mardia van der Walt-Korsten, who claims the deal, which has taken three years to complete, will position the company as the SA’s largest IT outsourcer, ahead of JSE-listed rivals Business Connexion and GijimaAst.
No job cuts are on the cards immediately, and management insists the focus for now is on growing revenue, not cutting staff costs.
“There is not a lot of fat to cut,” says Gert Schoobee, head of sales and strategy at T-Systems. “The focus is now more on growing the revenue line.”
Through the acquisition, T-Systems has added 1 400 Arivia employees to its payroll.
The deal gives T-Systems access to a number of important public-sector clients. In addition to large outsourcing contracts with Eskom and Transnet — both of which were renewed last year for a further period of five years — Arivia’s big clients include the department of water affairs & forestry and the Airports Company SA (Acsa).
The Acsa and water affairs contracts are up for renewal this year, and Van der Walt-Korsten says winning the deals again is “imperative” for T-Systems.
The acquisition has been a long time coming. Government first issued a request for information from interested parties in February 2007. Eventually, two bidders — the other suitor was Dimension Data — were shortlisted, with T-Systems eventually getting the nod in November 2008.
Negotiations with Eskom, which held 54% in Arivia, and Transnet, which had the remaining 46%, took another year before the deal was concluded.
T-Systems, which is 70% controlled by Deutsche Telekom — the German company financed the Arivia deal — also has a number of big private-sector clients, the largest of which is Old Mutual. — Duncan McLeod, TechCentral