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Datatec snaps up Comztek

by Stuart Wilson, Friday 30 November 2012

IT group Datatec has snapped up African distributor Comztek in a deal worth up to US$9.9m. Johannesburg-based Comztek employs some 200 staff and has annual sales of approximately US$120m. Datatec reckons that its latest acquisition is ‘highly complementary’ to its existing Westcon business in the region.

Jens Montanana, Datatec’s chief executive, commented: “This is an exciting opportunity to create a market leadership position across the continent which will extend and augment our existing emerging Africa and South African operations and bring a strong business with an excellent reputation into the group.”

Comztek’s distribution set-up covers 26 countries in Africa with operations in South Africa, Namibia, Zambia, Kenya and Mauritius. The company distributes a range of hardware and software products focused on networking, security and storage, datacentre and software infrastructure and unified communications solutions.

Comztek has a strong reputation in the African market and brings good channel access as well as a comprehensive ICT solution model. Datatec will acquire full ownership of Comztek from its current shareholders who include Mustek and various members of the management team through family and employee trusts.

Comztek will pay US$9m up front split evenly between cash and shares with top management also in line for a further US$900,000 if the distributor meets certain earnings targets set for the second half of calendar 2012. Whether or not these targets have been met should be known before the deal actually completes.

Once the deal is complete the Comztek business will be integrated with Westcon South Africa (WSA) and an internal reorganisation will begin which will involve Datatec’s BEE partner, the Mineworkers Investment Corporation (MIC) and several members of the Comztek management team subscribing for shares in WSA to increase MIC’s share of the combined business to 40%, and Comztek management’s share to 9.9%, leaving Datatec, through its subsidiary Westcon Emerging Markets Group with a shareholding of 50.1%.

Montanana added: “Comztek brings a complimentary vendor portfolio that has minimal overlap with Westcon’s own vendor portfolio, thereby adding strong new vendor relationships, along with highly skilled and experienced staff that will allow us to widen our offering to our respective customer bases. With revenues across Africa exceeding US$300m the combined business will boast the scale and addressable market to attract new vendors wishing to create a regional presence.“

“Africa remains a key growth market for us and this deal significantly expands our footprint and offering into many new markets. As the continent continues to develop our solutions and services will play an important part in the rapid adoption of more advanced IT and telecoms infrastructure,” he added.

Paul Conradie, managing director at Comztek, added: “This acquisition is a positive move for Comztek’s customers, our suppliers and our people. By joining forces with Westcon we will be able to further develop the markets where we have a presence as well as bolster the breadth of our offerings. We are delighted that both organisations have remained focussed and committed throughout this process which will result in the creation of a business that will have a market leading position across many parts of the African continent.”

DISTREE EMEA 2013

Top distributors, retailers and e-tailers from across the EMEA region are attending DISTREE EMEA 2013, the premier event for the regional ICT and CE channel, from February 19-22nd in Monaco.

DISTREE EMEA gathers hundreds of senior executives from EMEA’s Information Communications Technologies (ICT) & Consumer Electronics (CE) volume channel. DISTREE EMEA is a powerful business platform for vendors looking to manage, build or launch routes-to-market within EMEA. From A-brand vendors to start-ups, the DISTREE EMEA structure and reach offers business benefits and powerful return on investment.

During the course of the three-day event, delegates take part in thousands of pre-scheduled one-on-one meetings with hundreds of vendors. Each year, hundreds of new distribution agreements are struck across the region as a result of business relationships initiated at DISTREE EMEA.

DISTREE EMEA 2013 will also build on successful initiatives launched at last year’s sold out event including a regional awards ceremony. The ‘EMEA Channel Academy: 2013 Awards’ will include more than 20 categories for vendors and distributors from across the region.

www.distree-emea.com

For more information on attending DISTREE EMEA 2013 please contact fhemraj@distree.com quoting code DEMEA13

DISTREE_Events

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