Datatec`s Westcon Group announced today it has secured a US$150 million working capital facility and a US$40 million second lien term loan to finance its operations in North America.
The new credit facilities were arranged by HSBC in the US, which acts as the group`s international banking partner. SPP Capital Partners supported HSBC in arranging the second lien obligation.
According to David Pfaff, financial director of the JSE-listed Datatec Group, the working capital facility will be used to finance the operations of Westcon Group`s three US operating divisions, Comstor, Voda One and Westcon, as well as its business in Canada.
The second lien term loan will provide additional long-term capital to fund growth of the Westcon businesses and to repay certain debt obligations to Datatec Group.
Westcon Group performed soundly in the first six months to August 2005. Revenue increased by 8% to US$1.1b (2004: US$1.0b) while its gross margin rose from 7.6% to 8.5%. Operating expenses fell from 6.6% to 5.8% of revenue, helping the EBITDA margin to rise from 0.9% to 2.7% and EBITDA to grow by more than 200% to US$30.8 million (2004: US$9.9 million).
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Datatec is a leading international networking, systems and IT services company listed on the Johannesburg Securities Exchange (JSE) in South Africa, with operations in many of the world`s leading economies.
Datatec`s international operations contribute in excess of 95% of the group`s revenues mainly from the United States and Europe. The group positions itself as an active technology holding company focusing on investing in and developing lines of business which are complementary to its positioning as a networking, systems, integration service provider and consultancy group.
The group employs approximately 3 000 information and communications technology professionals around the world in over 20 countries in three principal subsidiaries:
* Westcon, New York-based and one of the world`s largest value added distributors of convergence, security and IP products, sourced largely from global market leaders Cisco, Avaya and Nortel.
* Logicalis, London-based and an international provider of high performance IT systems and integration solutions based on strong strategic alliances with market leaders Cisco, HP and IBM.
*Analysys Mason, Cambridge-based and a leading international telecommunications, convergence, IT strategy and management consultancy providing business solutions to public and private sector organisations worldwide.
The group`s other interests comprise Westcon AME and Online, mirrors of Westcon`s operations in the US but with the focus on markets in the Middle East and Africa, and RangeGate, a specialist mobile solutions provider to blue chip companies in the UK and South Africa.
Westcon Group
Westcon Group, Inc is a multinational specialty distributor of networking, security and communications equipment for leading technology vendors, including Cisco Systems, Inc, Nortel Networks Corporation and Avaya, Inc. Through its Westcon and Comstor divisions, Westcon Group sells products and services to resellers, systems integrators and service providers. Westcon Group has particular expertise in the convergence of voice, data and video applications and technologies, including voice over Internet Protocol, security for networking and communications systems, remote access, Internet and e-business, virtual private networks, video conferencing and wireless connectivity. For more information, visit www.westcongroup.com.
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