Computer Warehouse Plans Nigeria Fundraising by 2015Yinka Ibukun and Emele Onu
Computer Warehouse Group Plc, a Nigerian technology company, will seek to raise capital on the country’s stock exchange within 18 months after listing existing stock last week.
CWG needs extra funding to refocus the business toward cloud computing from hardware and software, Chief Executive Officer Austin Okere, 49, said in an interview yesterday at the company’s head office in Lagos, Nigeria’s commercial capital. CWG’s goal is to become the biggest cloud-computing provider in Africa by 2015, he said.
“In twelve to eighteen months time, we will approach the market again,” said Okere. “By that time, we would have crystallized our transformation process.”
The Nigerian Stock Exchange, Africa’s second-largest bourse, is seeking a $1 trillion market capitalization by 2016 by encouraging more technology and telecommunications companies to go public. The exchange is working to make it easier for companies from those industries to list, according to Nigeria’s Information and Communication Technology Minister Omobola Johnson.
“Our role is to be a trailblazer; to go to the exchange and show to people the value of going to the exchange,” Okere said. “I won’t be surprised if this now opens the path for many more IT companies to come and list.” CWG plans to sell shares on the U.S. technology-dominated exchange Nasdaq in the longer term, he said.
CWG’s shares have gained 4.5 percent since they were listed on the Nigerian Stock Exchange on Nov. 15, compared with a 3.2 percent gain on the all-share index over the same period.
CWG has a target to double profit in 2013 on sales of $132.2 million, according to Okere. The company is considering at least one acquisition, he said.
IT companies are increasingly turning to cloud computing, which allows businesses to share resources and applications via the Internet, as the margins are higher than traditional IT services. Dimension Data Holdings Ltd., a South African competitor owned by Japan’s Nippon Telegraph & Telephone Corp, acquired California-based OpSource in 2011 to accelerate its cloud strategy, according to a company press release.
CWG has a target to generate 75 percent of sales from cloud services by 2019, up from 15 percent now, with small and medium-sized businesses the main customer base, Okere said. The company still gets 53 percent of its revenue from hardware and almost a third from software.
Many African businesses have limited access to IT services and cloud technology would allow them to become more efficient and spend less on computers, according to a Nov. 20 report released by McKinsey Global Institute.