DTC
DTC
DTC - Datatec - Euro 53.25M Acquisition Of Noxs - European Security Products
Distributor
Datatec Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1994/005004/06)
ISIN: ZAE000017745
Share Code: DTC
("Datatec" or "the Company")
Euro 53.25M ACQUISITION OF NOXS - EUROPEAN SECURITY PRODUCTS DISTRIBUTOR
1. Introduction
Datatec Limited ("Datatec", "the Group", JSE and LSE: DTC) announces that
its subsidiary Westcon Group, Inc., ("Westcon"), has conditionally agreed,
as at 26 February 2007, to acquire NOXS Europe B.V. and NOXS Ireland Ltd.
("NOXS", "the Acquisition"), a leading European distributor of security
products and services, from Unit 4 Agresso N.V.("Unit 4") for a maximum
cash consideration of Euro 53.25 million (approximately US$69.4 million).
2. The Acquisition
NOXS is a leading European distributor of security products and services
with offices in France, Belgium, The Netherlands, Germany, the United
Kingdom, Ireland and Italy. NOXS` primary vendors include Juniper
Networks, Checkpoint Systems, Trend Micro, Nokia and McAfee.
NOXS generated over $220 million of revenue in the year ended 31 December
2006, considerably more than Westcon`s comparable revenues from security-
related products in Europe. Its EBITDA and EBIT for the year to 31 December
2006 were approximately US$9.3 million and US$8.4 million respectively.
The net tangible assets being acquired are approximately US$45 million as
at 31 December 2006. The business is being acquired on a debt/cash free
basis.
NOXS` product portfolio encompasses firewall/VPN, anti-virus, content
security, encryption, Security 3A (administration, authorization and
authentication), security enforcement and e-business. It also has a
services business including training, pre and post sales support and
managed services through its 4SureIT division.
Completion of the Acquisition is subject to European merger approval which
is currently expected to be received in early April 2007.
3. Financial effects of the Acquisition
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:
Before the Pro-Forma After the Change
Acquisition Acquisition
(US cents) (US cents)
Earnings per Share 15.59 17.68 13.4%
Headline Earnings per 15.65 17.73 13.3%
Share
NAV per Share 322 322 0.0%
NTAV per Share 209 192 (8.1%)
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 NOXS 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 Westcon`s existing accounting policies;
- a tax rate of 33.5% in Europe; and
- the NAV and NTAV pro-forma assumes the Acquisition was concluded
effective 31 August 2006 and uses NOXS`s unaudited balance sheet at 31
December 2006.
Jens Montanana, Chief Executive of Datatec, comments:
"This is a strategic acquisition for Datatec. It immediately positions
Westcon as a leading multi-national security distribution company, and
provides substantial additional scale in Europe. Significantly, this
acquisition also gives Westcon access to new vendors as well as providing
an enlarged footprint to distribute its existing product lines into new
markets and territories.
The substantial increase in scale and size which NOXS brings would not have
been possible to achieve through organic growth alone."
Enquiries:
Datatec Limited
(www.datatec.co.za)
David Pfaff, Group Finance
Director
Simon Morris, Group Financial + 44 (0) 1753 777 353
Controller
College Hill (UK press)
Adrian Duffield/Corinna Dorward + 44 (0) 20 7457 2020
Fleishman-Hillard (SA press)
Michelle de Pons/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.
In the six months to 31 August 2006, the Group reported an increase in
revenue of 16% to $1.67 billion (2005: $1.44 billion), EBITDA increased by
32% to $52.0 million (2005: $39.5 million), operating profit increased by
44% to $43.3 million (2005: $30.1 million), and headline earnings per share
grew to 15.65 cents (2005: 12.02 cents).
Johannesburg
27 February 2007
Merchant bank and sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 27/02/2007 09:00:01 Produced by the JSE SENS Department. |