JSE-listed Datatec has increased it shareholding in US company Westcon by 5% to 90.2% for R180 million, in a move it describes as necessary to effect management changes within the group.
The acquisition has been funded from internal cash reserves, and management says that had the acquisition been effective for the 12-month period ended 31 March 2001, headline earnings per share would have increased 3.5% or 13c.
The additional share holding allows Datatec to change certain management positions within the two groups. Alan Marc Smith, currently COO at Westcon, will now hold the position of CEO and president of the US company.
In addition to signing a new four-year agreement with the group, Smith will become a director at Datatec.
Westcon CEO Tom Dolan has been appointed as chairman of Westcon and will continue to lead the group to its initial public offering (IPO).
"Tom`s move to chairman will allow him to concentrate on the listing process, while Alan`s role as CEO will focus him on the operational activities of the group. Datatec`s increased stake holding and Alan`s appointment to the Datatec board illustrates the faith we have in the group as an operating entity and its future IPO," says Jens Montanana, Datatec chairman and CEO.
The remaining 9.8% of Westcon shares rest with Smith and other shareholders.
Datatec management postponed the listing of Westcon until market conditions picked up, but is adamant it will proceed with the plans.
Although the market`s initial reaction to the news was positive, by noon today the Datatec share had taken a very slight dip, trading down 45c at R16.55
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