Dual-listed Datatec has sold 100% of its technology distribution division Westcon-Comstor North America and Latin America operations and 10% of Westcon International to NYSE-listed Synnex for $800-million and $30-million respectively.

The aggregate $830-million consideration comprises the payment of $630-million on closing – $500-million in Synnex shares and $130-million in cash – with an additional $200-million cash earn-out payment subject to Westcon Americas’s performance in the 2018 financial year.

“There is strong industrial logic for the combination of the two businesses, which are highly complementary in North America. Westcon-Comstor’s specialisation and expertise in security, unified communications and collaboration and networking, combined with Synnex’s significant North American presence, extensive product line and large customer base, will provide for greater scale in services and capabilities for its partners,” explained Datatec CEO Jens Montanana.

The information and communication technology group believes the move would provide significant opportunity for growth across all of Westcon-Comstor and benefit from Synnex’s significant scale.

“The transaction also realises value for our shareholders as a result of the strategic relationship with Synnex through its shareholding in Westcon International – a business which is yet to benefit from the enterprise resource planning (ERP) and business process outsourcing (BPO) transformation programmes currently being implemented,” he added.

Westcon International, which comprises the Europe, Middle East, Africa and Asia Pacific operations, had been hit financially and operationally across its operations by the roll-out of the SAP ERP system and BPO, which was aimed at improving operating efficiencies and modernising its global information technology systems and commercial supply chain.

“The board does not, therefore, consider it an optimal time to sell Westcon International but, with Synnex as a partner, the transaction enables Datatec to focus on improving the financial performance of Westcon International, which will enhance its value in the longer term,” said Montanana.

The 10% sale also enables Westcon International to complete its transformation process and improve operating efficiency.

, there is significant potential for growth in the value of Datatec’s investment in the technology distribution sector through the 10.25% holding in Synnex and the operational synergies of the enlarged business.