JSE-listed computer assembler and technology distributor Mustek has sold its 41,8% stake in distributor Comztek to another JSE-listed IT company, Datatec, for R39,4m in cash and shares.
Comztek’s only other major shareholder, its MD Paul Conradie — who also holds 41,8% of the equity — has agreed to sell his stake to Datatec, too. The rest of the shares are held by Comztek management, who are also exiting as part of the deal.
Datatec is paying R88m in total for the acquisition.
Comztek, which distributes products on behalf of Cisco and Avaya, among others, will declare a dividend prior to the completion of the deal, pushing the effective value to Mustek of the sale to R44,4m. Mustek says the decision to sell the stake is part of its “ongoing drive to reduce debt by disposing of noncore assets”.
Datatec will pay Mustek R27,4m in cash and R12m in newly issued shares, which will be issued within two weeks of the conclusion of the transaction. Mustek says it intends to sell the Datatec shares once they’ve been received.
In Mustek’s 2012 annual report, for the year ended 30 June, the company says Comztek’s overall performance had been “disappointing”, although its broader African operations grew by 30% and delivered profits “well above budget”.
“A major setback was Microsoft’s appointment of a second distributor of its Xbox console and games, which reduced Comztek’s share of that market.”
According to Datatec, Comztek operates in 26 countries in Africa with operations in South Africa, Namibia, Zambia, Kenya and Mauritius and has annual revenue of more than R1bn. “Based in Johannesburg, its activities are highly complementary to those of Datatec’s Westcon business,” it says.
Mustek CEO David Kan says the company acquired its stake in Comztek about 10 years ago when it funded a management buy-out by Conradie and his business partner Leen van der Bijl of Q Data Distribution from PQ Africa (which later became Business Connexion). Van der Bijl sold his shares in the business about two years ago. — (c) 2012 NewsCentral Media
