| Wed 11 Apr 2007, 8:00 | | DTC - Datatec Limited - Proposed acquisition of cr |
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DTC
DTC
DTC - Datatec Limited - Proposed acquisition of crane telecommunications
Group for GBP20.7 Million
DATATEC LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1994/005004/06)
ISIN: ZAE000017745
Share Code: DTC
("Datatec" or "the Group")
PROPOSED ACQUISITION OF CRANE TELECOMMUNICATIONS GROUP FOR GBP20.7 MILLION
Datatec has conditionally agreed to acquire Crane Telecommunications Group
Ltd ("Crane", the "Acquisition"), a leading UK-based European value added
distributor of voice, data and converged communications solutions, from
various shareholders, including Apax PP Nominees Limited, for a maximum
consideration of GBP20.7 million.
The consideration payable on completion will comprise the issue of new
ordinary Datatec shares to the value of GBP9.2 million and GBP11.5 million
in cash. The vendors have agreed not to dispose of any new ordinary shares
received as consideration for a period of 90 days from completion. The cash
consideration will be funded from either the Group`s existing cash
resources or alternatively, at Datatec`s discretion, from an institutional
placing of new ordinary Datatec shares. The Acquisition is expected to
complete within the next 30 days.
Crane will be integrated into the European arm of Westcon Group, Datatec`s
distribution division. The purchase of Crane follows Datatec`s recent
acquisition of NOXS, a leading European security distributor, announced on
27 February 2007. These acquisitions are important steps in Datatec`s
strategic plans to leverage Westcon`s financial strength and scale of
operations in Europe, including both broadening and strengthening its
vendor relationships. These two businesses also bring new opportunities in
convergence, security and mobility to both new and existing customers.
Crane has offices in the UK and the Netherlands, and sells software,
telephony and data solutions to companies across Europe through a network
of more than 250 resellers. Crane has established partnerships with many
market-leading vendors including Avaya, Nortel, Alcatel, Mitel, BT Network
Services and Samsung, which will further broaden Westcon`s vendor base. In
addition, Crane provides value added services including system design,
consulting, technical support, product training and various other
professional services.
Crane generated GBP74 million of revenue in the year ended 31 December
2006. Its EBITDA and EBIT for the year to 31 December 2006 were
approximately GBP2.8 million and GBP2.1 million respectively. The net
assets of Crane are approximately GBP2.3 million as at 31 December 2006
(assuming that Crane`s preference share capital is treated as equity).
Normalised net debt at completion, all supporting working capital, is
estimated to be approximately GBP10 million. The Acquisition is expected
to be earnings-enhancing in the year to February 2008.
Jens Montanana, Chief Executive of Datatec, comments:
"The earnings-enhancing acquisition of Crane brings further breadth, depth
and scale to Westcon`s European operations and consolidates Westcon`s
position as a leading value added distributor of voice, data and
convergence products in Europe.
"The Acquisitions of Crane and NOXS have significantly strengthened
Westcon`s competitive position in Europe and we look forward to leveraging
the additional capabilities that they bring within the overall Westcon
portfolio."
The Acquisition is subject to a number of conditions precedent. The new
ordinary Datatec shares to be issued will rank pari passu in all respects
with the existing ordinary shares.
The financial effects have been prepared for illustrative purposes only and
because of its nature may not fairly present the issuer`s financial
position, changes in equity, results of operations or cash flows. The
financial effects are the responsibility of the directors. The Acquisition
would have had the following effect on Datatec`s earnings per share,
headline earnings per share, net asset value ("NAV") and net tangible asset
value ("NTAV") per share for the six months ended 31 August 2006, based on
the assumptions set out below:
(US cents) Before the Pro-Forma after % change
Acquisition the Acquisition
Earnings per Share 15.59 15.76 1.1
Headline Earnings per 15.65 15.81 1.0
Share
NAV per Share 322 326 1.2
NTAV per Share 209 191 -8.4
The pro-forma earnings per share, headline earnings per share, NAV and NTAV
have been prepared on the following assumptions:
- figures before the Acquisition are the unaudited interim results of
Datatec for the six months ended 31 August 2006;
- 147.2 million Datatec shares in issue at 31 August 2006;
- funds are invested at an interest rate of 5% and borrowed at 7%;
- the results of Crane are the unaudited results for the six months
ended 31 December 2006;
- intangible fixed assets will be recognized on completion and amortised
in accordance with Datatec`s existing accounting policies;
- a tax rate of 30% in the UK;
- the NAV and NTAV pro-forma assumes the Acquisition was concluded
effective 31 August 2006 and uses Crane`s unaudited balance sheet at 31
December 2006; and
- Crane`s preference share capital is treated as equity for the purpose
of these financial effects.
Enquiries:
Datatec Limited
(www.datatec.co.za)
David Pfaff, Group Finance
Director
Wilna de Villiers, Group +27 (0) 11 233 1013
Marketing Manager
College Hill (UK press)
Adrian Duffield/Corinna + 44 (0) 20 7457 2020
Dorward
Fleishman-Hillard (SA press)
Lucien Vallun + 27 (0) 11 548 2000
Note to Editors
Datatec is an international Information & 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), IT
infrastructure solutions and network integration (Logicalis) and strategic
telecommunications consulting (Analysys Mason). Datatec is registered in
South Africa and its shares are listed in Johannesburg and London. The
Group has 2,500 employees around the world.
On 14 March 2007 Datatec issued a trading and earnings update for the year
ended 28 February 2007 which stated that Group consolidated revenues are
expected to increase by 17% to almost $3.5 billion (2006: $2.98 billion).
It also stated that the Group is expecting to report EBITDA of
approximately $117 million (2006: $85m) for the year ended 28 February
2007.
Westcon
Westcon Group, Inc. is a multi-national 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.
Sandton
11 April 2007
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 11/04/2007 08:00:28 Produced by the JSE SENS Department.
