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Datatec expands in Latin America

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Logicalis Group, a subsidiary of Datatec, will merge its Latin American operations with leading Brazilian network integration businesses of Promon Tecnologia (PT) in a $77,2-million transaction. 

Logicalis will pay PT`s owner, Promon SA,  up to $77,2-million in cash and new shares for a 70% equity holding in the combined business.  Promon SA will have a 30% equity interest in the business.
PT is the leading independent Brazilian network integrator and Cisco`s largest partner in Brazil. It reported revenue of more than $140-million last year.
As part of the transaction, assets of $11,6-million will be acquired, including about $15-million of cash.
PT's customers include most of the major service providers and telcos operating in Brazil, and recently the business has started diversifying into other vertical markets including energy (oil and gas), financial, manufacturing and public sector markets.
The transaction will provide Logicalis with a platform for further growth in Latin America and is in line with Datatec`s strategy of increasing the proportion of revenues and profits generated from developing countries and emerging markets.
By combining PT in Brazil with Logicalis's operations in Argentine, Uruguay, Chile, Peru and Paraguay, the organisation will be the largest network integrator in the region, with about 500 employees.
Jens Montanana, chief executive of Datatec, comments: "This is a key strategic transaction for Datatec as it catapults Logicalis into becoming the leading independent integrator, not only in Brazil but across the whole of Latin America.  It also adds a significant new geographic revenue and profits stream to Logicalis in the largest economy in South America.
"We believe Brazil has the best corporate governance of any of the BRIC countries as well as having the most advanced economy in the region. We have been operating in the country for over ten years and merging with PT is a rare opportunity to secure a market leading business with a strong management team," he adds.
"Significantly, this transaction gives both Logicalis and PT access to new skills which will enable the enlarged business to target new markets and customer verticals across the continent.
"This earnings enhancing transaction also fits well with our group strategy to widen our geographical footprint and comes shortly after Westcon, our global distribution business, also significantly increased its presence in Brazil."