Datatec added 2.15% on Wednesday to settle at R56.50 per share, buoyed by its announcement of a special dividend. On the 13th of November 2017, the board announced its intention to declare a special dividend of $350mn, or around R5bn, pursuant to the sale of Westcon Americas. Following this, the board has now decided to declare a special dividend of R23 per share to ordinary shareholders. Furthermore, shareholders will also have the option to receive the dividend in the form of a scrip distribution of fully-paid ordinary shares. If shareholders elect to receive shares instead of cash, the board will use the full undistributed cash amount to undertake a general buyback of shares.
Datatec surged 8.25% on Monday after announcing it had completed the sale of a portion of its operations to SYNNEX. This will see Datatec sell its Westcon-Comstor business in North America and Latin America, as well as 10% of the remaining part of Westcon, for $830mn. The proceeds of this transaction will be split between $630mn in cash on completion and up to $200mn payable as a cash earn-out. Looking forward, the board will be reviewing options for the use and distribution of the cash proceeds, but intends to retain $130mn for various working capital and expansion funding requirements.
Datatec surged 10.53% yesterday after the group released a SENS announcement regarding the Westcon-Comstor transaction. The transaction will see Datatec sell Westcon-Comstor’s North American and Latin American business for up to $800m and 10% of the rest of Westcon-Comstor for $30m to SYNNEX. The consideration of $830m will be paid in two tranches, with a maximum of $630m payable upon closing, while an additional $200m will be subject to the performance of Westcon’s North and Latin American business during the FY 2018. The maximum consideration of $830m equates to an equity valuation of $1.1bn for the total Westcon-Comstor division.