Westcon charges into Africa with US$7.2m acquisition

Networking distributor Westcon has dramatically doubled the size of its operations in the African market by snapping up a 51% interest in the Sparnoon-Dynatech Group.

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By  Andrew Seymour Published  June 14, 2007

Networking distributor Westcon has dramatically doubled the size of its operations in the African market by snapping up a 51% interest in the Sparnoon-Dynatech Group. The firm has shelled out US$7.2m for the stake with an option to extend its holding over the next five years.

Sparnoon-Dyantech claims to be the largest sub-Shaharan distributor outside of South Africa and boasts a presence in multiple emerging territories across the continent.

It will give Westcon - a subsidiary of South African group Datatec and parent of Cisco specialist Comstor - access to markets such as Botswana, Ghana, Kenya, Namibia, Nigeria, Tanzania and Uganda. The firm also has logistics centres in Kenya, Dubai and the UK.

As part of the transaction, Sparnoon-Dyantech has itself purchased JET Distribution, another wholesaler operating in Africa. Westcon says these acquisitions will help catapult sales from its South African and African businesses from US$70m to US$150m a year. The Johannesburg-listed firm also believes the deals will push EBITDA up from US$2.1m to US$3.6m on an annualised basis.

Jens Montanana, group chief executive at Datatec, insists the acquisitions fit with the company's objective of extending its coverage in emerging markets.

"These acquisitions boost the Group's presence in the emerging markets as well as increase our scale and enhance our product mix," he said. "Both are key priorities for Datatec. They also enhance Westcon's industry-leading position in the networking, security and convergence markets with its footprint reaching beyond South Africa into seven other African territories where there is significant growth potential."

Like its new parent, Sparnoon-Dynatech has a strong affiliation with Cisco and a large customer base of networking resellers. The company also provides a route to market for several other top brands including HP, Dell, APC, Novell and Epson.

JET Distribution, meanwhile, carries a similar set of vendors in its portfolio and serves the East and West African region. It also has offices in South Africa and the UK.

The double acquisition caps an aggressive period of market expansion for Datatec in EMEA. Earlier this year it launched Westcon in the Middle East and finalised the takeovers of security specialist NOXS and telecommunications distributor Crane in Europe.

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