International ICT experts, Datatec, announced in June that they would be selling their value-added technology distribution company, Westcon-Comstor, to "Synnex", an IT supply chain services company. The acquisition was agreed at a price of $830 million. On the 30th of August, Datatec's shareholders came together to vote on the plans for sale, in a "general shareholder's meeting".
According to the reports from Datatec, the meeting represented 76.72% of the shares for the company, and of those attending, 100% voted in favour of approving the business transaction. In other words, it seems safe to say that everyone at Datatec is eager for this deal to go ahead.
The Westcon-Comstor Sale
The price for the Westcon-Comstor business came from an overall decision to sell Weston Americas to the IT supply chain company for a maximum amount of $800 million, along with a 10% sale of the remaining Westcon International business for $30 million.
The decision to sell came after some rather unfortunate financial results for Westcon-Comstor this year. According to the audited provisional results for the year ending on the 28th of February 2017, Datatec had seen a decline in revenue of about $338 million, or 5.8%, year-over-year. According to Datatec, the challenging financial results came as a result of the negative impact that Westcon-"Comstor's business process outsourcing and SAP had on the overall company.
In their discussion over the acquisition, Datatec noted that the transaction with Synnex would give them a great opportunity to partner up with a leading distribution business, and improve their overall scale. According to the CEO of Datatec, Jens Montanana, Westcon-Comstor North America should benefit significantly from becoming a bigger business, with a far greater market.
