Datatec has conditionally agreed to acquire Crane Telecommunications Group Ltd, a UK-based European value-added distributor of voice, data and converged communications solutions, for a maximum consideration of £20,7-million (about R292,7-million). 


Crane will be integrated into the European arm of Westcon Group, Datatec’s distribution division, and follows Datatec’s recent acquisition of European security distributor NOXS on 27 February 2007.
These acquisitions are part of Datatec’s strategic plan to leverage Westcon’s financial strength and scale of operations in Europe, including both broadening and strengthening its vendor relationships. The two new businesses also bring new opportunities in convergence, security and mobility.
Crane has offices in the UK and the Netherlands, and sells software, telephony and data solutions to companies across Europe through a network of more than 250 resellers.
Crane has established partnerships with many market-leading vendors including Avaya, Nortel, Alcatel, Mitel, BT Network Services and Samsung, which will further broaden Westcon’s vendor base.
In addition, Crane provides value-added services including system design, consulting, technical support, product training and various other professional services.
Jens Montanana, chief executive of Datatec, comments: “The earnings-enhancing acquisition of Crane brings further breadth, depth and scale to Westcon’s European operations and consolidates Westcon’s position as a leading value added distributor of voice, data and convergence products in Europe.
“The acquisitions of Crane and NOXS have significantly strengthened Westcon’s competitive position in Europe and we look forward to leveraging the additional capabilities that they bring within the overall Westcon portfolio.”
Crane generated £74 million of revenue in the year ended 31 December 2006. Its EBITDA and EBIT for the year to 31 December 2006 were approximately £2.8 million and £2.1 million respectively. The net assets of Crane are approximately £2.3 million as at 31 December 2006 (assuming that Crane’s preference share capital is treated as equity). Crane’ normalised net debt at completion, all supporting working capital, is estimated to be approximately £10 million.  The acquisition is expected to be earnings-enhancing in the year to February 2008.
The consideration payable on completion will comprise the issue of new ordinary Datatec shares to the value of £9.2 million and £11.5 million in cash. The vendors have agreed not to dispose of any new ordinary shares received as consideration for a period of 90 days from completion. The cash consideration will be funded from either the Group’s existing cash resources or alternatively, at Datatec’s discretion, from an institutional placing of new ordinary Datatec shares.  The Acquisition is expected to complete within the next 30 days.
The pro-forma earnings per share, headline earnings per share, NAV and NTAV have been prepared on the following assumptions:
* Figures before the acquisition are the unaudited interim results of Datatec for the six months ended 31 August 2006;  
* 147.2 million Datatec shares in issue at 31 August 2006;
* Funda are invested at an interest rate of 5% and borrowed at 7%;   
* The results of Crane are the unaudited results for the six months ended 31 December 2006;
* Intangible fixed assets will be recognized on completion and amortised in accordance with Datatec’s existing accounting policies;
* A tax rate of 30% in the UK;
* The NAV and NTAV pro-forma assumes the Acquisition was concluded effective 31 August 2006 and uses Crane’s unaudited balance sheet at 31 December 2006; and
* Crane’s preference share capital is treated as equity for the purpose of these financial effects.