UAE's e& expands regional reach with $60m acquisition of Turkey's GlassHouse

UAE telecoms and technology company e&'s digital transformation arm, e& enterprise, has completed the acquisition of Turkey-based digital firm GlassHouse, boosting its portfolio and allowing it to enter three markets in the competitive Middle East and Africa region.

The $60 million purchase, which was announced in June, marks the company's entry into Turkey, Qatar and South Africa, e& said on Thursday in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.

That brings the e& group's operational presence to 34 markets, in which, the company provides the latest cloud and its associated managed services in key sectors such as banking and finance, backed by German software company SAP.

The acquisition boosts e&'s "value proposition by reinforcing our capabilities, adding vertical expertise and expanding into high-growth markets", said Salvador Anglada, chief executive of e& enterprise.

"This acquisition is another bold step in our journey to becoming a regional leader in end-to-end digital transformation.”

Istanbul-based GlassHouse is a major player in Turkey's cloud services sector, offering managed cloud, private sovereign cloud and SAP Infrastructure services to more than 2,000 companies in multiple geographies, according to the statement.

It is particularly active in the financial services sector, serving nine of the top 10 banks in Turkey, it added.

Enterprises and governments continue to embrace digital transformation as they prepare for the society and economy of the future, especially as more emerging technologies pave the way for more seamless and inclusive activity.

This has prompted the adaptation of these innovative technologies to streamline and optimise operations in order to expand consumer bases and add new revenue lines amid intensifying competition.

In the Middle East and Africa region, the sector has become highly competitive, with global investments flowing in – especially to the UAE and Saudi Arabia, the Arab world's two biggest economies – to bolster this strategy.

Digital solutions backed by robust infrastructure and consulting expertise have helped companies and users navigate through an end-to-end digital transformation journey. The growth in providing essential digital services has been a key driver in e& enterprise's aggressive expansion.

For e& enterprise, acquisitions have always been a focus: the broadening of its portfolio reflects the success of its strategy over the past years and has enabled it to grow both organically and inorganically, Mr Anglada previously told The National.

Among its most notable acquisitions are a majority stake in Dubai-based peer-to-peer lending platform Beehive and a 65 per cent stake in Bespin Global MEA, created as a joint venture company with South Korea's Bespin Global.

Digital transformation is also an enormous opportunity for both economies and businesses that provide related services.

Revenue in the Middle East and Africa digital transformation market is projected to surpass $217 billion by 2030, from an estimated $37.8 billion in 2023, growing at a compound annual rate of 28.4 per cent, latest data from Grand View Research shows.

The "robust portfolio" of e& enterprise, comprising "innovative strategies", will help GlassHouse clients "accelerate their digital transformation journey", said Alp Bağrıaçık, chief executive of GlassHouse.

As a group, e& has maintained a strong performance. For the second quarter of 2024, e&'s net profit jumped by more than a quarter year-on-year to nearly Dh3.2 billion ($861.8 million), as its subscriber base grew 5 per cent to almost 15 million, the company reported earlier this month.

Revenue hit nearly Dh14.1 billion in the three months ending June, up 3.5 per cent annually. The company’s board of directors also approved an interim dividend of 41.5 fils a share for the first half of 2024.