Datatec sells part of Indigo stake

Johannesburg - Datatec (DTC), a networking and services company, on Tuesday announced that it has disposed of its 55% stake in African Legend Indigo to focus on growing its Westcon distribution business in South Africa.

The company said the divestment follows a strategic review of South African assets.

"As a result of this decision, Datatec has increased its ownership in Westcon SA from 55% to 74.9% through the disposal of its 55% stake in African Legend Indigo and the issue of 275 578 new Datatec shares," the company said in a statement to the JSE.

Westcon SA is a distributor of ICT equipment and forms part of Datatec's Westcon Emerging Markets Group.

African Legend Indigo is a systems integrator and enterprise management solutions provider and one of South Africa's leading Sun Microsystems value-added resellers.

Prior to the transaction both Westcon SA and African Legend Indigo were 55% owned by Datatec in partnership with African Legend Computing as a minority black economic empowerment partner.

In terms of the transaction, Datatec will purchase 19.9% of the shares and shareholder equity loans in Westcon SA from African Legend Computing for a consideration of R12.7m made up of 55% of the shares and equity loans in African Legend Indigo plus 275 578 new Datatec shares to a value of R4m.

The net result of the transaction is that Datatec now owns 74.9% of the shares in Westcon SA, with African Legend Computing owning the remaining 25.1%, and African Legend Computing now owning 100% of African Legend Indigo.

At 09:20 shares in Datatec were unchanged at 1 570c on the JSE.

The stock has gained 6.80% this month to date.

- I-Net Bridge