The rumour mill has been working at full-speed lately, with new whispers circulating in the market about the potential sale of “Westcon-Comstor”. Though these rumours aren’t exactly new, they’ve been gathering substance ever since Datatec, the parent company for Westcon Group, announced that they were in the process of negotiating “material transactions”. Right now, the rumours indicate that the sale is definitely in the works, with plans to sell a large portion of the company for no less than $800 million.
What’s Going on with Datatec?
Way back in 1998 (practically forever ago in technology terms), Datatec spent around $160 million of its hard-earned budget to purchase an overwhelming 92.5% stake in the WestconGroup development. Soon after, the group expanded into Europe, a market which now accounts for about 34% of the distributor’s overall sales revenue.
Datatec currently operates across three different core divisions. They control their technology distribution side through Westcon group, and manage other things like managed services and integration through “Logicallis”. In terms of research and consulting, the majority of the company is managed through “Analysys Mason”.
The Upcoming Sale
Synnex and Arrow Electronics have apparently emerged as potential buyers for the distributor, Westcon, if it actually is up for sale. However, at this point, neither company has agreed to disclose any information about the possible acquisition. The idea seems to be that everything needs to be kept as cloak and dagger as possible as we move deeper into 2017, and new potential sales are announced.
In fact, even Datatec are in on the mystery act. They recently announced a vague statement in reference to the “possible” sale which said that couldn’t identify for certain whether a transaction would be completed. The statement went on to say that this business also refused to reveal any precise terms on which a transaction may be completed. As such, shareholders are being advised to continue exercising some caution when it comes to dealing with company securities.
What will Happen if the Sale is a Success?
It’s difficult to say what’s going to happen if a sale actually does go through without a little more information. However, Datatec has already told regulators that the “material transaction” they have agreed to could have a serious impact on the company’s stock price if it’s successful. Right now, Datatec are worth around $6.5 billion, but Westcon-Comstor hasn’t been doing very well during its recent quarterly updates.
In fact, the latest figures suggest that Westcon’s revenue saw a drop of around 10% during the last filing period, to around $2.6 billion, with sales dropping in every region besides the Asia-Pacific area. The rumour is that it makes plenty of sense to offload this under-performing company, yet for now, no-one will confirm or deny anything.
