Webafrica recently acquired Mweb and now serves a combined 500,000 homes and businesses. It plans to reach 1 million subscribers in as little as three years.
In September, Dimension Data accepted an offer from Webafrica to acquire Mweb for an undisclosed amount.
Webafrica chief commercial officer Greg Wright said the deal is “being funded with their balance sheet”.
Mweb will continue operating as an independent entity, and Wright said they aren’t expecting any layoffs due to the deal.
Dimension Data said the transaction aligned with its strategy of focussing on core markets servicing its enterprise client base.
The Competition Commission approved the acquisition in October on the condition that Webafrica implement an Employee Share Ownership Programme and an HDP transaction.
Webafrica CEO Sean Nourse said he was ecstatic to bring one of South Africa’s most loved brands on board.
Speaking to Smart Money, Nourse said Webafrica strongly focuses on growth and connecting as many homes as possible to the Internet.
“Mweb is the largest fibre-to-the-home Internet service provider (ISP) in the market, and it accelerates our growth,” he said.
“It gives us the growth to continue to be successful and the scale and synergies to reinvest into the business.”
He said Webafrica and Mweb services over 500,000 combined customers. “We have ambitions to double that,” he said.
“Through Mweb and Webafrica, we will be able to reach the 1 million connected customer mark – possibly in the next three years.”
The two companies employ 622 people, which Nourse said make a difference by helping customers to connect to the Internet.
The advantage of serving as Mweb and WebAfrica CEO
Before heading up Webafrica, Nourse served as Mweb CEO for three years – between October 2017 and July 2020.
He said his experience having served as chief executive of both ISPs is critical to the deal’s success and the combined entity’s growth.
“It gives out shareholders a lot of confidence. A lot of the Mweb staff are still there, and they know me and how I operate,” he said.
He highlighted that deals between two organisations, which were fierce competitors for 25 years, typically don’t work because of the uncertainty among the workforce.
“Hopefully, I will be able to put that uncertainty to rest. Both organisations know me, and we work well together,” he said.
He explained that their two-brand strategy – with Mweb and Webafrica operating independently – has numerous advantages.
The two brands appeal to different customers. It includes brand awareness among various segments, the operating model, and the people at the company.
“The two brands stop one of them trying to be everything to everyone. We can now work within each brand’s niche and make it bigger and better,” he said.
There are also many synergies where the two ISPs can benefit from areas of excellence in both service providers.
For example, Mweb has built exceptional processes, procedures, and support. “We want to tap into that and take it into Webafrica,” he said.
Another benefit is that there is double the institutional intelligence in the combined Webafrica and Mweb entity when compared to either one.
This article was first published by Daily Investor and is reproduced with permission.