DATATEC LIMITED - Recapitalisation of Westcon International Limited
22 June 2020 17:00
Recapitalisation of Westcon International Limited

Datatec Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1994/005004/06)
ISIN: ZAE000017745
Share Code: DTC
("Datatec" or "the Company" or "the Group")

Recapitalisation of Westcon International Limited

Datatec Limited, the international Information and Communications Technology (ICT) Company, has
carried out a recapitalisation of its subsidiary, Westcon International Limited (the “Transaction”).

Following the disposals of Datatec’s Westcon-Comstor business in North America and Latin America
(“Westcon Americas”) to SYNNEX Corporation (NYSE: SNX) (“SYNNEX”) in September 2017, the retained
part of Westcon was renamed Westcon International (“WI”) and a 10% interest in WI was acquired by
SYNNEX, with Datatec retaining a 90% share.

WI is the head company of Datatec’s technology distribution division which carries on the business of the
distribution of security, collaboration, networking and data centre products and solutions in Europe, the
Middle-East, Africa and Asia-Pacific regions.

Datatec holds its interest in WI through Datatec PLC, a UK intermediate holding company 100% owned
by Datatec.

Background and rationale for the Transaction
As at 29 February 2020, WI owed Datatec Group companies approximately $160 million in intercompany
loans (of which $146 million was owed to Datatec PLC). With the $160 million of intercompany loans
being classified as debt in WI’s stand-alone balance sheet, the Net Asset Value (“NAV”) of WI was
$21.9m as at 29 February 2020. In Datatec’s consolidated annual financial statements these
intercompany loans eliminated on consolidation, reflecting a higher NAV for the Westcon segment.

Datatec has agreed to convert $80 million of Datatec PLC’s loans to WI to equity, in order to improve the
WI stand-alone balance sheet. A stronger stand-alone balance sheet will place WI in a better position to
raise bank funding with improved commercial terms from its financiers. It will also improve WI’s credit
insurance rating.

There are no conditions precedent to the Transaction and the effective date is 19 June 2020, increasing
Datatec PLC’s shareholding in WI to 92.1%.

The minority partner in WI, SYNNEX, did not participate in the capitalisation transaction, with the effect
that their shareholding in WI reduced from 10% to 7.9%.

Jens Montanana, Datatec CEO, said:

“This recapitalisation of Westcon International will strengthen its stand-alone balance sheet
enabling it to obtain a better credit rating and improved commercial terms”.

Financial effects of the Transaction

The value of the net assets and the profits attributable to the net assets that are the subject of the
Transaction have been extracted from the stand alone unpublished management accounts for WI for the
year ended 29 February 2020 and are shown in the table below:

                                          Stand alone
                                     29 February 2020
                                             US$’ 000
Net assets                                     21 933
Loss after tax                               (13 226)

Because these figures are from the stand-alone management accounts of WI they include intercompany
loans, management fees and interest payable to other Datatec Group companies. Datatec is satisfied with
the quality of the management accounts from which these stand-alone results have been obtained.

The WI net assets and loss after tax have been included in the audited results of the Datatec Group for the
year ended 29 February 2020 with appropriate adjustments to eliminate the intercompany loans,
management fees and interest. The Datatec Group results were prepared in accordance with the framework
concepts and the measurement and recognition requirements of International Financial Reporting Standards
(“IFRS”) in effect for the Group at 29 February 2020.

22 June 2020

RAND MERCHANT BANK (A division of FirstRand Bank Limited)

Date: 22-06-2020 05:00:00
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