AccessKenya now completes Sh168m buyout of Openview

AccessKenya has announced that it has completed a Sh168 million buyout of its subsidiary Openview Business Systems.

The development means that the company now has total ownership of its IT services division, allowing it to implement a diversification of its product offering which now includes the provision of software and data storage in addition to internet connectivity.

“With the purchase of the remaining 30 per cent of the business, we were now fully able to integrate a number of functions fully into the group. We expect to see good growth during this year from recurring services contracts which we are very actively selling to our existing customer base as well as non customers,” said Mr David Somen, Access Kenya director.

Saying that it now favoured a more cautious approach to acquisitions - preferring to invest more in its country-wide fibre network rather than buying into other smaller companies - AccessKenya now stands poised to reap the benefits of a two year wait to enter the software industry.

When AccessKenya took over the firm in 2007, it inherited a firm that claimed to have around 200 customers who were mainly made up of government agencies and banking institutions.

But the division’s profit dipped in 2008, forcing its parent company to invest heavily in order to shift the divisions focus to more favourable areas.

Mr Somen said that the company was forced to initiate a major restructuring of the business in September last year, refocusing it on gaining recurring service revenues alongside high margin software sales and high end storage solutions.

Just two weeks ago, AccessKenya won a landmark contract to supply a $1.3 million online system to the government that would see it provide the state with a system that would improve efficiency and transparency of government and donor-funded reconstruction programmes in the country.

The Electronic Project Monitoring Information System for the Government of Kenya (e-ProMIS Kenya) enables Treasury to continuously monitor project performance at every stage in order to ensure transparency and encourage public participation.

Exercised option

AccessKenya, previously an internet service provider, purchased its stake in Openview in order to tap into the convergence of industry technologies that would see the traditional lines dividing ICT businesses dissolve.

The company started the search for a partner in the IT services industry soon after its listing in June 2007, shortlisting Openview from a list of 15 companies.

AccessKenya initially petitioned the Capital Markets Authority (CMA) to purchase 70 per cent of the issued share capital of Openview, in return for 4 million shares in the listed company.

The internet firm said it was targeting 100 per cent ownership in two years following the successful growth of the new division.

An announcement in the daily press this week indicated that AccessKenya had exercised its option to purchase the remaining 30 per cent of shares in Openview for cash and 428,588 shares in the group.