Matrix Capital Markets Group (804) 780-0060 - Case Study: Dimension Data/Proxicom

Case Study: Dimension Data/Proxicom - Divestiture

Situation

Dimension Data Plc (LSE: DDT.L), is a South Africa based provider of network infrastructure solutions with $2.1 billion in sales.
Proxicom, founded by Raul Fernandez in 1991, is a leading Web development and IT services firm headquartered in Reston, Virginia. Dimension Data acquired Proxicom in 2001 for $448 million.
Proxicom was burdened with expensive excess lease obligations that resulted from the Company’s significant growth during the late 1990s to early 2001 and the subsequent decline in the IT services market.

Objective

Dimension Data made the decision that Proxicom was no longer a fit with Dimension Data and that it would no longer fund the Company’s losses resulting from its excess lease obligations.

Solution

Matrix Capital was engaged by Dimension Data and Proxicom to market the Company to both strategic and financial buyers in a very compressed timeframe.
Through a disciplined yet aggressive auction process, Matrix Capital contacted over 150 prospective buyers within a month of being engaged.
Proxicom was ultimately sold to Gores Technology Group just four months after Matrix Capital was engaged at a valuation that was a 15% premium over the median of all offers received.