SALE OF WESTCON AMERICAS TO SYNNEX CORPORATION

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Hannah Jefferson
5 years ago
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1 Technology Distribution Integration & Managed Services Consulting & Research SALE OF WESTCON AMERICAS TO SYNNEX CORPORATION CONFERENCE CALL BRIEFING 6 JUNE 2017

2 HIGHLIGHTS SYNNEX to acquire Westcon Americas for up to $800m SYNNEX to acquire 10% of Westcon International for $30m Option to acquire further 10% interest in Westcon International for $30m Consideration of $830m $630m on closing: $500m of SYNNEX shares and $130m of cash $200m performance based earn-out payment over two years SYNNEX can elect to settle the share component in cash Jens Montanana will be appointed to SYNNEX s board Excellent value crystallisation Creates major player in North American technology distribution market Complementary partnership provides significant growth opportunities for both businesses Datatec

3 ABOUT SYNNEX CORP. Datatec

4 STRATEGIC RATIONALE SYNNEX and Westcon Americas are highly complementary businesses Combination of Westcon-Comstor s Security, UCC and networking with SYNNEX s significant North American presence, extensive product line and customer base Greater addressable market and scale in services and capabilities for North America Enhanced exposure to technology distribution through SYNNEX shareholding Focus on driving operational improvement and financial performance of Westcon International SYNNEX partnership will create extra opportunities for Westcon Comstor businesses Jens Montanana to join SYNNEX board (if shares part of consideration) Datatec

5 STRATEGIC RATIONALE (CONT D) Application of sale proceeds $130 million in cash Datatec to retain for operational purposes and working capital $500 million* of SYNNEX shares (10.25% of issued share capital) Deferred and contingent cash payments of up to $200 million - intention to be returned to shareholders in due course SYNNEX shares subject to restrictions 25% of the shares may be sold within one year after completion Further 25% within two years; remainder thereafter. Any sale subject to SARB Excon restrictions If SYNNEX elect to settle in cash, Board will review the application of that cash * value at 1 June 2017, based on 20 day VWAP Datatec

6 FINANCIALS FY17 RESULTS OF WESTCON-COMSTOR $million Westcon Americas Westcon International Westcon Total FY17 revenue: North America Latin America Europe Middle East and Africa Asia-Pacific Total Revenue FY17 EBITDA 89 (35) 54 FY17 Profit / (loss) after tax ( PAT ) 23 (33) (10) Westcon Americas 48% of revenue; Westcon International 52% of revenue Westcon International includes global support costs PAT includes management fee charges incurred by Westcon Americas in favour of Westcon International and corresponding management fee income in Westcon International. Management fees charged to Westcon-Comstor by Datatec Group are not included in the PAT figures Datatec

7 FINANCIALS (CONT D) FY17 NET ASSETS OF WESTCON-COMSTOR $million Westcon Americas Westcon International Westcon Total FY17 Net Assets Total Net Assets attributable to the parent Which includes net debt: (115) (288) (403) Net assets shown exclude Datatec consolidation journal entries relating to goodwill NET ASSETS AND PROFITS - THE SUBJECT OF THE TRANSACTION The Transaction $million Westcon Americas Westcon International Disposal Group Total SYNNEX acquires % 100% 10% Net assets EBITDA 89 (4) 85 PAT 23 (3) 20 Consideration Datatec

8 NEXT STEPS & ENVISAGED TIMELINE Circular to be posted in accordance with JSE LR and AIM Rules Further information on the Transaction Convening general meeting of shareholders Regulatory requirements and customary closing conditions to be fulfilled Commercial approvals Competition authority approvals Datatec shareholder approval (see Circular noted above) South African Reserve Bank approval Internal reorganisation, legal structure and international agreements of Westcon-Comstor to be amended to separate Westcon Americas and Westcon International Current completion date expected for calendar Q Cautionary withdrawn Datatec

9 Technology Distribution Integration & Managed Services Consulting & Research QUESTIONS Datatec 2017

10 DATATEC GROUP DISCLAIMER This presentation may contain statements regarding the future financial performance of the Group which may be considered to be forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty, and although the Group has taken reasonable care to ensure the accuracy of the information presented, no assurance can be given that such expectations will prove to have been correct. The Group has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. It is important to note, that: unless otherwise indicated, forward-looking statements indicate the Group s expectations and have not been reviewed or reported on by the Group s external auditors; actual results may differ materially from the Group`s expectations if known and unknown risks or uncertainties affect its business, or if estimates or assumptions prove inaccurate; the Group cannot guarantee that any forward-looking statement will materialise and, accordingly, readers are cautioned not to place undue reliance on these forward-looking statements; and the Group disclaims any intention and assumes no obligation to update or revise any forward-looking statement even if new information becomes available, as a result of future events or for any other reason, other than as required by the JSE Limited Listings Requirements. Datatec

Datatec Westcon-Comstor $830 million transaction withdrawal of cautionary

DATATEC LIMITED (Incorporated in the Republic of South Africa) (Registration number: 1994/005004/06) ISIN: ZAE000017745 Share Code: DTC Datatec Westcon-Comstor $830 million transaction withdrawal of cautionary