Datatec sells West­con-Com­stor to Synnex for $830m

The Star Early Edition - - COMPANIES - Ka­belo Khu­malo

DUAL-listed South African In­for­ma­tion and com­mu­ni­ca­tion technology group Datatec said yes­ter­day that it had sold its West­con-Com­stor Amer­i­cas busi­ness to Synnex for $830 mil­lion (R10.59 bil­lion) as the two groups look to cre­ate a ma­jor player in the North Amer­i­can technology dis­tri­bu­tion mar­ket. Datatec shares rose 10.53 per­cent on the JSE yes­ter­day to close at R56.48.

Jens Mon­tanana, Datatec’s chief ex­ec­u­tive, said that post-trans­ac­tion, the West­con-Com­stor busi­nesses would work seam­lessly to­gether for its ven­dors and cus­tomers glob­ally, en­abling it to un­lock fur­ther po­ten­tial for West­con In­ter­na­tional.

“West­con-Com­stor North Amer­ica will ben­e­fit sub­stan­tially from be­ing part of a big­ger busi­ness with a much larger ad­dress­able mar­ket – and so will our share­hold­ers with our stake in Synnex.

“The trans­ac­tion also re­alises value for our share­hold­ers as a re­sult of the strate­gic re­la­tion­ship with Synnex through its share­hold­ing in West­con In­ter­na­tional,” Mon­tanana said.

As part of the deal, Mon­tanana will join the Synnex board of di­rec­tors as a non-ex­ec­u­tive di­rec­tor.

Datatec’s last fi­nan­cials saw group rev­enue down 5.8 per­cent to $6.08bn from the pre­vi­ous pe­riod, while its prof­its fell from $48.4m to $10.7m.

West­con-Com­stor ac­counted for 74 per­cent of the group’s rev­enue. And with the group’s rev­enue hav­ing gone down, Asia Pa­cific and Latin Amer­ica were the only re­gions not record­ing lower rev­enue, with the Asia Pa­cific rev­enue hav­ing been $488m for the year ended Fe­bru­ary.

Datatec first an­nounced in Jan­uary that it was in dis­cus­sions over a mys­te­ri­ous “trans­ac­tion” re­lated to a por­tion of its busi­ness.

Un­der the terms of the deal Synnex will ac­quire 100 per­cent of West­con Amer­i­cas for up to $800m and also take a 10 per­cent stake in West­con In­ter­na­tional for a fur­ther $30m.

The deal price con­sists $500m in stock and $100m in cash at clos­ing and an ad­di­tional $200m cash earn-out pay­ment sub­ject to West­con Amer­i­cas fi­nan­cial year 2018 per­for­mance.

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