In an announcement released on the Stock Exchange News Service this morning, Datatec said it would pay Routine Capital Corporation about R97.6 million for its stake.
Datatec's purchase of the 2.6% stake will be paid for through $2.375 million in cash and a loan of $11.88 million, which will be paid back over a five-year period, starting next September.
Westcon is the group's largest operating entity and accounted for 69% of the company's $3.7 billion revenue in the year to February. During the most recent financial year, Westcon turned over $2.6 billion, a $200 million decline on 2009.
Based on the company's latest financial results to February, the buyout will improve Datatec's headline earnings per share by 1.9%, adding three US cents to each measure of profitability.
Westcon has a presence in the Americas, Europe, Asia Pacific and SA. It distributes networking, security, mobility and convergence products for vendors that include Cisco, Polycom and Juniper.
Datatec says it arrived at the purchase price by using an independent external valuation for 100% of the shares in Westcon as of the end of the last financial year, and then applying various discounts.
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