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.
What’s Next for Datatec?
If everything goes according to plan, the Datatec transaction should be completed at the end of the third calendar quarter for 2017. Until that time, both Synnex, and Westcon-Comstor will continue to operate separately. Jens announced that the sale is an exciting opportunity for Westcon to partner with a strong Fortune 500 corporation.
The sale should benefit both Datatec, and shareholders alike, and Jens noted that after the acquisition is completed, the Westcon-Comstor businesses will be working together for Datatec customers and vendors around the world, allowing for more potential success to come from Westcon International.
