Datatec ("Datatec", "the group", JSE and LSE: DTC) announces that its subsidiary Westcon Group ("Westcon"), has acquired the assets of ReView Video LLC ("ReView"), a leading US distributor of audio, network, videoconferencing and voice over IP (VOIP) solutions, from ReView Video LLC for a cash consideration of $25 million.
The purchase price will be paid entirely from Westcon's cash resources and the transaction is expected to be accretive in the current financial year.
ReView Video is a leading US value added distributor of audio, network, videoconferencing and VOIP solutions with offices in Chicago, Illinois.
ReView has focused on building a world-class team of sales and service professionals to support its customers. This team has combined expertise in sales, service, support, training, maintenance and operations.
Having previously distributed solutions for multiple vendors, Review became a Polycom exclusive distributor at the end of 2006 and is one of the largest Polycom distributors in the United States. ReView also has rights to sell Polycom's IP video and audio conferencing products in the UK.
The worldwide market for Polycom products is growing rapidly as video conferencing solutions become an integrated component of enterprise communication and as environmental considerations drive customers to consider alternatives to reduce emissions.
ReView generated revenue and EBITDA of approximately $57 million and $4 million respectively in the year ended 31 December 2006. The net assets of the business were approximately $1.2 million as at 31 December 2006. The business is being acquired on a debt/cash free basis. The consideration comprises $25 million in cash at closing (subject to certain escrow/withholding retentions).
Jens Montanana, Chief Executive of Datatec, comments: "This is an important strategic acquisition for Datatec as it immediately positions Westcon as a leading voice and videoconferencing distribution company. Significantly, this acquisition makes Westcon one of the leading Polycom distributors in the world. ReView's strength in IP-based video conferencing products and services, combined with Westcon's focused technology solutions and operational infrastructure, represents an enormous opportunity for its customers."
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Datatec is an international Information and Communications Technology (ICT) group focused on the supply of advanced ICT and the delivery of professional services into the higher growth segments of the global market. The group's main lines of business comprise the global distribution of advanced networking and communications convergence products (Westcon Group), IT infrastructure solutions and network integration (Logicalis) and strategic telecommunications consulting (Analysys Mason Group). Datatec is registered in South Africa and its shares are listed in Johannesburg and London. The group has 3 000 employees around the world.
In the year to 28 February 2007, the group reported an increase in revenue of 17% to $3.2 billion (2006: $2.7 billion), operating profit increased 45% to $100 million (2006: $69 million), and headline earnings per share grew to 40.80 cents (2006: 26.9 cents).
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