 PAST VISIONARIES
A strategic move to the top
“An IT business strategist who enjoys the art of the deal.” __ Terry Murphy
The early years:
1974: Left Unilever in to start his own business in the IT industry. Bought Mercedes Office Machines, a distributor of Adler typewriters and Toshiba copiers.
1976: Acquired a midrange computer company called Hamac.
1977: Formed Mercedes Information Technologies [MIT], a holding company, which had the Adler typewriter business as its first subsidiary, and subsequently Hamac and Datakor.
1977: Started Datakor as a networking business targeting the traditional mainframe environment.
1978: The first equipment designed by Datakor was very sophisticated network controllers and protocol converters.
1986: Sankorp takes a 26% stake in MIT
1986: Voted the Best Non-listed Company
1987: Mercedes Datakor lists on the JSE as a subsidiary of MIT
1988 Mercedes Datakor takes a 26% stake in Dimension Data
1988: Acquires Unisys for R140 million
“THE SAND SHIFTS QUICKLY AND YOU HAVE TO BE ON TOP OF IT THE WHOLE TIME, YOU HAVE TO LOOK AHEAD AND MAKE ALTERNATIVES.”
Nic Frangos
When I first met Nic, during an interview six years ago, he was chairman of JSE listed Datakor. Today, three years after leaving the IT industry, he is an investor in numerous business ventures.
Whatever your opinion of the man, it is his willingness to take risks as well as foresight and ability to adapt to change which set Nic apart from others.
In February 1988, shortly after Mercedes Datakor purchased a 26% stake in Dimension Data, Computer Week quoted Nic as saying: "I see Dimension Data becoming the number one data communications company in SA within three years."
He has certainly been proven right. But the road Nic embarked on in 1974, when he left Unilever and acquired his first company in IT industry, was not an easy one.
Simple strategy
His strategy was simple, but effective - acquire a company that may not play a key role in the future, but which is riding on top of the current technology wave. Such a company can generate sufficient cash flow to fund new and more capital-intensive business that are at the beginning of their S-curves.
In 1974, Mercedes Office Machines, the then distributor for Adler typewriters and Toshiba copiers, met Nic's criteria. It had a well-established distribution network throughout SA and a strong base from which to generate cash flow for other opportunities.
Networking was the future growth opportunity Nic identified and Datakor was formed, positioned as a networking business targeting the traditional maineframe market. In 1977, he created Mercedes Information Technologies (MIT) as the holding company and by the mid 1980s, Sankorp was brought in as a 26% investor just prior to Datakor's listing on the JSE in 1987.
The first of many significant acquisitions to follow were a 26% stake in Dimension Data and the purchase of Unisys during the sanctions era. The rest, as they say is history.
The one thing Nic consistently did over a 20-year period was to transform his business into relevant technologies. For example, when it looked as if the typewriter would be eclipsed by the word processor, Datakor secured a local distribution rights for Lanier, the world leader at the time. By the early 1980s it was outselling IBM in word processing in SA by three to one.
Unfortunately, in the early 1980s, Lanier and its principal had a fall out and today does not exist in word processing. The lesson learnt? “The sands shift quickly and you have to be on top of it the whole time, you have to look ahead and make alternatives.”
Changing structure
MIT has been successful because its structure changed on a regular basis. “I have never considered structure to be anything more than a mechanism to achieve goals. As soon as your goals change, you change your structure.”
Nic has set his sights on a new growth area, one where the digitisation of complex content will allow for manipulation and transmission at increasingly faster speeds.
In July, he again made headlines when, as part of Sasani, he was up against Primedia's William Kirsh in the fierce battle for control of entertainment group Interleisure. The R1.7 billion price tag, however, turned out to be too much and he bowed out of the race.
But knowing Nic, he is not one to procrastinate and is not afraid to take risks. “I believe one cannot drive forward looking in the rear mirror. But the one lesson I have learnt, is to always persevere.”
His “growth through acquisition” approach to business has also not changed. With his current stake in Blue Sky networks and Video Lab (ex Interleisure), and close involvement with Kagiso, it would appear Nic still has a few aces up his sleeve.
By Mariette Du Plessis
Finding a balance in life:
“I have always had a strong work ethic. My personal goals have been to work hard and become independent. One thing, however, I have never found is a balance in life, I am still searching. It is something I am coming to terms with now. The one thing I am passionate about though, is golf. I think it is the most extraordinary game ever invented.” |
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