Datatec has sold a 5% stake in its Westcon subsidiary as part of a refinancing move valuing the fast-growing distie at $950m.
In a stock exchange announcement this morning, Datatec CEO Jens Montanana claimed the new structure “preserves and accelerates the winning Westcon-Comstor formula”.
Westcon-Comstor CEO David Grant hailed it as “an important milestone” in the cyber, networking and comms distie’s evolution, meanwhile.
It will see General Atlantic come on board as Westcon’s long-term lender and also snap up a 5% minority stake in the Cisco, Check Point and CrowdStrike ally for $25m.
Although the refinancing will see their stake shrink from 5% to 2.1%, the new structure “further embeds senior management in the business as shareholders”, Montanana claimed.
Senior management get a “reset” management incentive plan that “aligns management incentives with the post-capitalisation capital structure”, he added.
“Accelerating the winning formula”
Westcon-Comstor – which ranked 7th in the most-recent Oxygen Must-Know UK IT Distributors and Marketplaces – has been a star performer for Johannesburg-listed IT group Datatec in recent years.
It achieved its seventh consecutive year of top-line growth in the group’s fiscal 2026. EBITDA grew at a CAGR of 24% during the period.
The General Atlantic partnership will provide capital as required to “support exciting opportunities for expansion in our sector”, Montanana said.
“After assessing various strategic options, we have concluded a structure which we believe preserves and accelerates the winning Westcon-Comstor formula,” he said.
“World-class management with one of the most experienced executive teams in the industry will continue to take the business forward while broadening the strategy.
“Datatec, with 40 years of experience in this industry, will retain control while partnering with General Atlantic, one of the world’s leading providers of capital, as both a minority investor and lender to the business.”
$950m valuation
General Atlantic’s minority investment values Westcon at an equity value of $950m before the repayment of the shareholder loan (which is funded by $375m from General Atlantic and $75m from Westcon’s existing financing facilities).
That valuation falls to $500m after the repayment happens.
To put that in perspective, the world’s two largest IT distributors, TD Synnex and Ingram Micro, currently boast market valuations of $22.9bn and $6.6bn, respectively. One of Westcon’s closer peers, Exclusive Networks, was valued at €1.71bn before it was taken private last year, meanwhile.
The transaction comprises a partial refinancing of the existing $450m intercompany fixed return instrument shareholder loan through a new six-year $375m senior secured debt facility provided by General Atlantic.
As a consequence of the refinancing, Westcon’s interest cost will increase, as intercompany loans are replaced with external debt, Datatec acknowledged.
“We are delighted to partner with Jens and the Westcon-Comstor team in pursuit of the company’s next phase of growth,” stated Leo Wouters, Managing Director at General Atlantic.
“We believe our capital and strategic support can help to unlock compelling opportunities as Westcon-Comstor continues to build out its product portfolio and international presence.”
The refinancing has an intended closing date of 14 July.
Datatec has owned Westcon since 1997. One of its two key subsidiaries alongside Logicalis, it generated a $172.4m adjusted EBITDA on gross sales that rose 10% to $5.74bn in the year to 28 February 2026.
