Datatec CEO Jens Montanana. says partnering with Atlantic Park Capital will enhance subsidiary Westcon's financial capability and growth prospects.
Image: Leon Nicholas
Datatec’s share price rallied after telling its shareholders they are in line for a special dividend of up to R7.1 billion arising out of the proceeds of a major refinancing that positions the group well to scale up its operations.
The share price ended 5.87% higher at R89,97 on the JSE on Friday, one of the top five movers on the JSE on the day, a price also well above the R63,75 it traded at a year ago.
The information and communication technology company said Friday its subsidiary Westcon International had reached agreement with Atlantic Park Strategic Capital II Designated Activity Company and Atlantic Park Strategic Master Fund III, for the refinancing of Westcon International Group Holdings (WIGH), the holding company of the Westcon group of companies, as well as for a minority investment in WIGHL.
“Partnering with a global institutional capital provider will enhance Westcon's financial capability. The business is at an inflection point in its evolution and the robustness of the organisation is at a point where further scale could produce an acceleration in performance improvement while appealing to additional technology suppliers and customers,” Datatec’s board said.
Jens Montanana, Datatec CEO, said the new structure preserves and accelerates “the winning Westcon-Comstor formula. World-class management with one of the most experienced executive teams in the industry will continue to take the business forward while broadening the strategy.”
"Datatec, with 40 years of experience in this industry, will retain control while partnering with General Atlantic, one of the world's leading providers of capital, as both a minority investor and lender to the business. This partnership will provide capital as required to support exciting opportunities for expansion in our sector,” he said.
Leo Wouters, managi director at General Atlantic said they had a longstanding relationship with the Datatec.
"We believe our capital and strategic support can help to unlock opportunities as Westcon-Comstor continues to build out its product portfolio and international presence," said Wouters.
Westcon, operating as Westcon-Comstor group, is a global distributor and provider of communications, networking, cyber security, and cloud infrastructure.
Datatec has owned the business since 1997. It operates in over 50 countries across Europe, Asia-Pacific, the Middle East, and Africa. It also has a small presence in the US.
The business is experiencing significant growth driven by AI-enabled infrastructure investment, hyper-scaler growth driving more network access, edge computing that is expanding with smarter, faster end-user devices, and a threat landscape that is growing exponentially, fuelling demand for more cyber security solutions.
Westcon achieved its 7th successive year of top-line gross invoiced income growth in its last financial year, with an earnings before interest, tax, depreciation, and amortisation (EBITDA) compound annual growth rate of 24% over this period.
For the financial year ended February 28, 2026, Westcon had net assets of $127.7 million and taxed profit of $66.8m.
The refinancing transaction comprises the partial refinancing of the existing $450m intercompany shareholder loan advanced by WIL to WIGHL through a new 6-year $375m senior secured debt facility provided by General Atlantic.
It also comprises a cash equity co-investment by General Atlantic to acquire 5% of the share capital of WIGHL from existing shareholders.
The transaction also comprises the issue of shares in WIGHL to General Atlantic, and the restructure of the WIGHL management incentive plan.
After the transaction, the shareholder loan, together with accrued interest, will be repaid in full. The proceeds from the shareholder loan, together with the proceeds from the equity co-investment, were expected to generate cash proceeds to Datatec of about $434m (R7.1bn).
Datatec’s board said the equity co-investment and the warrant shares issued to General Atlantic align its interests with those of Datatec and Westcon management and provide Westcon with access to General Atlantic's global network and sector expertise to support its growth strategy.
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