South Africa's Datatec lifted by sale of Americas business to Synnex


The Fremont, Calif. -based distributor said it will pay an additional $30 million for a 10 percent stake in Westcon-Comstor's $2.35 billion global business, which includes Europe, the Middle East and Africa, and Asia-Pacific.

South African tech giant Datatec has confirmed that they will be selling Westcon-Comstor for R10.5 billion ($830 million).

SYNNEX will also acquire 10% of Westcon International for $30 million and have an option to acquire a further 10% within 12 months after completion of this deal. "We are excited to welcome the Americas organization to the SYNNEX family and look forward to leveraging their global expertise to serve our customers in new and innovative ways", said Kevin Murai, President and CEO of SYNNEX. "Westcon-Comstor is a recognized leader in the security, UCC and networking space". On 22 May, Datatec said it wouldn't pay a final dividend.

"Our customers will gain access to complementary technology solutions and businesses services that open up new opportunities to accelerate growth", Dolph Westbros, CEO of Westcon-Comstor, said in a statement. Their breadth of customers and technology solutions will be a tremendous benefit to our portfolio.

Synnex Corporation has revealed plans to become a minority shareholder in the Asia Pacific business of Westcon-Comstor, alongside outright acquisitions of the distributor's Americas business.

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Datatec says the time isn't right for the sale of Westcon International, with the company's financial and operational performance materially affected in the last financial year by the roll out of the SAP ERP system and business process outsourcing across its Asia Pacific and EMEA businesses.

Montanana will be appointed to the Synnex board.

Both entities expect to benefit from Westcon-Comstor's recent completion of its global business transformation: an SAP implementation and business process outsourcing across five continents, meant to deliver consistent and improved customer services while generating significant efficiencies.

The transaction, which remained subject to a number of conditions including shareholder and regulatory approvals, is expected to close in the third quarter of this year. That's the highest price at which the company's stock has traded since October 2015.