Another windfall for Datatec shareholders - Jens Montanana — Datatec CEO Jens Montanana

Datatec is bringing in General Atlantic – a major global growth equity firm – as a minority investor and lender in Westcon-Comstor, its networking and cybersecurity distribution arm.

The deal values Westcon at US$950-million (roughly R15.5-billion) and generates about $434-million (R7.1-billion) in cash for Datatec, which it intends to pay out as a special dividend to shareholders.

Datatec announced on Friday that it had signed binding agreements with General Atlantic for the recapitalisation of Westcon. The transaction is expected to close on 14 July 2026.

The deal has two main components. General Atlantic will provide a new six-year, $375-million senior secured debt facility at 9%/annum, partially refinancing an existing intercompany shareholder loan of $450-million. Separately, it will pay $25-million in cash for a 5% equity stake in Westcon and will receive warrant shares structured to replicate the economic effect of 4% penny warrants and 8% at-the-money warrants – giving it a further share in Westcon’s equity value accretion above $540-million.

Together, full repayment of the intercompany shareholder loan – funded by the $375-million General Atlantic facility and $75-million from Westcon’s existing financing facilities – plus the $25-million equity co-investment will generate cash proceeds to Datatec of about $434-million (R7.1-billion). The company says it intends to distribute these proceeds to shareholders by way of a special dividend. The exact quantum, record date and payment date will be announced separately.

Value unlock

The transaction values Westcon at $950-million before repayment of the shareholder loan and $500-million after. On day one after closing, Datatec, through its Westcon International subsidiary, will hold an 89.2% economic interest in Westcon, down from 95%, with General Atlantic holding 8.7% and Westcon management 2.1%.

Westcon-Comstor, which Datatec has owned since 1997, is a global distributor and provider of communications, networking, cybersecurity and cloud infrastructure operating in more than 50 countries. The business reported net assets of $127.7-million and profit after tax of $66.8-million for the financial year ended 28 February 2026, and has delivered a compound annual Ebitda growth rate of 24% over the past seven years.

Datatec CEO Jens Montanana said the structure “preserves and accelerates the winning Westcon-Comstor formula” while bringing in a partner with the capital and network to support further expansion. “Datatec, with 40 years of experience in this industry, will retain control while partnering with General Atlantic, one of the world’s leading providers of capital, as both a minority investor and lender to the business,” he said.

Leo Wouters, MD at General Atlantic, said the firm was “delighted to partner with Jens and the Westcon-Comstor team in pursuit of the company’s next phase of growth”, adding that General Atlantic’s capital and strategic support could “help to unlock compelling opportunities as Westcon-Comstor continues to build out its product portfolio and international presence”.

The proceeds would mark another in a series of payouts Montanana has engineered as he works to close what he has long argued is Datatec’s chronic undervaluation relative to its international peers. In 2017, the group returned up to $500-million – then about R6.5-billion – to shareholders after selling its Westcon-Comstor Americas operation to Synnex. In 2021, it paid a special dividend of about $70-million after Westcon repaid intercompany loans – the same mechanism now being deployed on a far larger scale. And in 2022, Datatec distributed £135.1-million – R2.7-billion, or R12.50/share – from the roughly £140-million sale of its controlling 70% stake in telecoms consultancy Analysys Mason.