Storm sale.

OK.  I can finally say it.  We've sold.  And yes, it is to Vox.  

Mixed feelings.  A part of my soul will be forever attached to the Storm brand and I'm feeling a sense of loss.  But I'd be kidding myself to say I joined up to grow old with Storm.  I'm not a corporate man and I'm more suited to the chaos & stresses of Startup than the order and stresses of Corporate process and politics.

I have no idea where I will be in a few months time, but I'm quite comfortable with that.

One thing I can say is that I've learned that one can do a lot with a team of competent people who learn to trust each other and play to each others strengths.  Stormers are a great bunch & I salute the lot of you for getting us to this point.

ITWeb article(s)

Business Report article.

The press release from Vox:

Vox Telecom to buy Storm

It is official. Vox Telecom will buy Storm, one of its biggest rivals in the least-cost-routing and VoIP market.

Vox Telecom has announced its intention to buy Storm Telecom in a R360m deal. Storm Telecom provides telephony and internet services, including voice over IP (VoIP), least cost routing, international call-back, virtual private networks and internet access, hosting and security to medium and large-sized South African companies.

It has over 6,000 contracted customers and monthly annuity income of over R22 million.

Vox Telecom will integrate Storm’s telephony business into its subsidiary Orion Telecom, the data business into corporate ISP DataPro and the consumer ISP business into consumer ISP, @lantic Internet

“Storm is a major player in the voice and data markets, with a very strong VoIP platform and customer base,” says Vox Telecom CEO Douglas Reed.

“They also bring VoIP skills that are complementary to ours. The acquisition strengthens our stated strategy of establishing Vox Telecom as the preferred telecommunications alternative to the domestic incumbents. It will considerably improve our position in the VoIP telephony market and augment our corporate customer base profile and market share.”

“This is a very positive development for Storm’s customers as they will be able to still benefit from the current Storm services, but will have a further advantage from the economies of scale that the larger Vox Telecom group offers”, said Willem van Rensburg, CEO of Storm Telecom.

“There will be a seamless transition from a customer perspective, with the same products being supported by the merged entity, but they will also be able to take advantage of the other products and services available from Vox Telecom.”

“We continue to look for acquisitions that are strategic, accretive to earnings and allow us to improve our scale and strategic positioning in the South African telecommunications market”, says Vox Telecom Executive Chairman Tony van Marken. Storm is in our strike-zone and is an excellent fit with our existing businesses.”

Van Marken says the deal also offers “significant synergies once the businesses are integrated. Storm is a significant asset to add to the Group and will be a key contributor to future growth and earnings.”

The R360m purchase price is to be funded through a combination of debt and equity financing. The deal is still subject to approval by the Competition Commission and other regulatory bodies including the Reserve Bank and the JSE.

Comments

[DaveG]

Hi Paul,

If only it was all mine! LOL. My very small shareholding will pay off some debt and might see my kids through their schooling, but I'm afraid I need to ensure I have a higher % equity in the next venture I tackle. If ever the saying "you need money to make money" were more obvious to me, it is right at this moment.

Thanks for the kind words.

[Paul]

Hey Dave

Congrats on the deal! I am sure the R360m will help keep the grocery basket full while you decide where to dedicate your energies next ...