FAQ - Acquisition of Xigo by Dimension Data

Who is Xigo?

Founded in 2000 and based in Manassas, Virginia, Xigo provides Telecom Expense Management (TEM) services to large and medium commercial enterprises and government agencies. Although small – the company employs 100 staff - Xigo is a mature business with developed processes and a solid delivery platform.  Xigo’s SaaS application, Xigo Enterprise can either be used by organisations in a self-service model or forms the foundation for Xigo-provided Managed services.  Xigo adds value to organisations in two ways:

• The optimisation of spend on mobile and fixed line telecommunications through better management of contracts, invoices, inventory and usage;
• Operational efficiencies through tighter management of the telecommunications services lifecycle
  process (procure-to-pay), better use of headcount, avoidance of late payment penalties and increased governance (Sarbanes Oxley ‘Ok to Pay’ requirements) and security.

Its portfolio of services is focused on extending its hosted service platform, managing carrier data, tracking inventory, and providing services for both fixed and mobile life cycle management integrated within a single cloud-based solution.  

Xigo has an excellent client satisfaction and retention track record.

Why did Dimension Data acquire Xigo?

There were a number of reasons why Dimension Data acquired Xigo:

• The acquisition of Xigo will accelerate Dimension Data’s ability to aggregate on-premise and telecommunications services thereby becoming a Managed Communications Service provider
• Purchasing Xigo expands Dimension Data‘s breadth of cost optimisation and lifecycle services
  both inside and outside the firewall.
• Xigo adds a key missing component to Dimension Data’s Enterprise Mobility value proposition. If we consider the Dimension Data’s Enterprise Mobility Framework, Xigo directly addresses contract management, policy management, risk management, expense management, service catalogue and carrier selection.
• Xigo has an excellent client satisfaction and retention track record.
• Xigo has strong management, strong operations.
• Xigo has shown consistent organic growth and is profitable (some of Xigo’s larger competitors are not profitable).
• Dimension Data’s relationship with Xigo goes back over four years.  In 2010, the relationship was further cemented when the two companies concluded a strategic global partnership agreement  to offer the industry's first localised global telecom expense management solution.

What criteria did Dimension Data use in their decision to acquire Xigo?

Dimension Data has enjoyed a four-year relationship with Xigo, and a global partnership between the two companies has been in place since 2010. In addition:

• Xigo has good management and operations; excellence in execution, and there’s a perception of the company’s capabilities in the market.
• Xigo has an excellent client satisfaction track record with low client churn, and there’s a good culture fit between the two companies.
• The acquisition allows Dimension Data to globalise its Managed Services offerings.
  

What did Dimension Data pay for Xigo?

The terms of the acquisition are confidential.

What is the effective date of the acquisition?

The effective date of the acquisition is 18 January 2012.

Will Xigo be rebranded to Dimension Data in the future?

The intention is for Xigo to be rebranded to Dimension Data when appropriate.

Will Xigo employees be integrated into Dimension Data?

Xigo becomes a wholly-owned subsidiary of Dimension Data and as such, Xigo’s employees become part of the extended Dimension Data family.

Who are Xigo’s clients?

Xigo provides telecommunications expense management services to large commercial enterprises and government agencies. The bulk of their clients are companies in North America.

Do Dimension Data and Xigo share any clients?

The two companies have very little client overlap which provides both Xigo and Dimension Data with the potential to leverage each other’s client bases.

What synergies exist between Xigo and Dimension Data?

The major synergy comes from cross-selling into the client base of both organisations. The acquisition is focused on growth and enablement of Dimension Data’s Managed Communication Service offering.

Will there be any management changes at either Xigo or Dimension Data as a result of this acquisition?

Dave Spofford will continue in his role as CEO of Xigo, providing executive leadership and guiding Xigo’s growth and synergies with Dimension Data.  The Xigo team will remain intact and continue to grow.

What other TEM deals were concluded over the past 12-18 months?

Vodafone acquired Quickcomm and TnT Expense Management – both at the same time

• Emptoris acquired Rivermine
• IBM acquired Emptoris
• Tangoe went public and acquired HCL and the Telwares TEM practice. Also Profitline and Anomalous Networks
  

Does Dimension Data plan similar acquisitions in either the US and/or other regions?

Dimension Data will continue to monitor the worldwide markets for appropriate acquisitions. Meanwhile, our intention is to roll out the skills that Xigo brings to Dimension Data globally in the next 12-24 months.