In a deal worth R97-million, Mustek has acquired the outstanding 34.2% shareholding in Rectron it needed to make it a wholly-owned subsidiary.
Mustek has bought more than 19-million shares from Rectron CEO Mark Lu and a further 21-million from the Lu Chang Trust for R49.7-million, with a potential further consideration of R46.8-million over five years subject to defined milestones.
Both Mustek CEO, David Kan and Rectron's Lu were quick to allay fears in the market that the deal marked an exit strategy for Lu who, it is reliably learnt, has had several lucrative job offers from overseas IT companies.
"It is clear that this is not an escape exit for Mark [Lu] from Rectron as he has signed a contract with the company for five years," says Kan. "The deal is simply a consolidation of our investment and has been sealed in order to maximise our procurement."
Lu says the deal now gives Rectron the financial muscle it needs to become a distribution powerhouse in the sub-continent.
"My commitment to Rectron remains the same as it always has – it is like a second son to me," Lu says. "Through Mustek, I have no doubt that we will grow stronger and I have five years to further prove myself. I have a five-year contract in place and I want to work for those five years.
"There is a lot of work to be done and this is a great challenge," he says. "It is always easy to build an empire, but it is harder to maintain one – and even harder to appoint a successor.
"So it's a great challenge for me."
Lu says that Mustek's financial backing is a boon for Rectron.
"Mustek's backing will help us when dealing with vendors, free us up financially, and allow us to be more flexible," he says