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Issue Date: June 2007

Acquisitions expand African footprint

28 June 2007

Datatec ('Datatec', JSE and LSE: DTC), the international information and communications technology (ICT) group, announced today that its subsidiary, Westcon Africa Middle East (Westcon), has acquired a 51% interest in the Sparnoon-Dynatech Group, an established African ICT distributor. The vendors retain a 49% shareholding, with a mechanism whereby up to 100% could be acquired over five years from completion. As part of the transaction, Sparnoon-Dynatech Group has itself acquired 100% of JET Distribution, another African ICT distributor. The consideration paid by Datatec was $7,2 million in cash.
These acquisitions are expected to be earnings accretive to Datatec. Revenues of Westcon’s South African and African distribution operations will increase from approximately $70 million to approximately $150 million on an annualised basis as a result of these acquisitions and EBITDA will increase from $2,1 million to $3,6 million on an annualised basis.  Net cash acquired with these acquisitions is $0,3 million.
The acquisitions are in-line with the Group’s stated strategy to grow its emerging market footprint. The acquisitions extend Westcon’s footprint into Botswana, Ghana, Kenya, Namibia, Nigeria, Tanzania and Uganda and positions the company as the only global ICT distributor operating on the African continent with warehousing and logistics support in Africa, Europe, and Dubai. Other key benefits include access to a broader and more immediately available stock than that offered by competitors and the addition of valuable market knowledge and experience of Africa’s rapidly developing ICT market.

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