Datatec ("Datatec", "the Group", JSE and LSE: DTC) announces that its subsidiary Westcon Group, ("Westcon") has increased in aggregate its banking facilities by $156 million to $360 million (up from $204m) for its North American and European subsidiaries.
These enhanced facilities are at a lower interest rate and will provide additional working capital facilities to support Westcon`s organic and acquisition growth programme, without recourse to Datatec`s own facilities.
Westcon has recently acquired North American-based ReView Video, as well as two European-based distributors: Crane Telecommunications and NOXS, adding more than 400 employees and approximately $350 million in annual revenue.
Westcon also recently announced a joint venture with Netex, a speciality distributor based in Turkey, adding to the emerging markets recently opened in New Zealand, Malaysia and Dubai.
In North America, the new banking facilities consist of $280 million, up from $190 million, with the ability to add $40 million, if necessary. In Europe, Westcon`s subsidiary increased its existing facilities by $66 million to $80 million.
David Pfaff, Group Finance Director, comments: "This is an important development for Westcon and the Datatec Group. It brings down the cost of capital for Westcon and provides the business with considerable headroom to continue its rapid organic and acquisitive growth without calling on Datatec`s resources or shareholders.
"We think this is a significant refinancing achievement: not only have we prudently locked in more favourable terms in an environment of increasing credit spreads, but we have also increased our capacity to borrow more. It attests to the fundamental strength of our underlying businesses."
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