Westcon Group, a subsidiary of Datatec, has acquired Latin American and Iberian multinational firm Afina Group in a €50 million deal. Founded in 1990, Afina focuses on distribution of security and data centre software and employs over 400 staff.
The transaction bolsters Westcon's play in the cloud space, strengthens relationships with key vendors such as VMware, Riverbed, Symantec and Citrix, and builds on Westcon's presence in Latin America, the Caribbean, Europe and North Africa.
In a statement to channel partners, Dean Douglas, CEO & President, Westcon Group, indicated that the acquisition will introduce strategic benefits to partners across the board. He also said that Latin America continues to be an important marketplace for Westcon.
"The market is entering a highly robust period of IT spending driven mostly by Brazil and Mexico," he stated. "Most analysts predict the region will generate more than $310 billion in IT spending in 2012. With this acquisition, Westcon immediately expands its already strong presence across these regions, enabling partners to capture significant new market opportunities."
According to Douglas the acquisition brings a number of benefits to partners. "For service providers and system integrators it will immediately strengthen the outstanding automation and cross-theatre support we offer via our Global Procurement System," he said in a statement.
"For regional partners, the acquisition will afford the opportunity to rapidly move into adjacent markets. For resellers, the agreement offers the ability to leverage Afina relationships to bring an expanded portfolio to market."
Douglas noted that the integration of Afina will be a 'deliberate and considered process'. "We believe the continuation of this business in culture and go-to market is essential to our future success and we are committed to ensuring the value offered by both businesses remains strong," he added.
The transaction will be settled by the payment of €30 million in cash funded from new loan finance and €10 million in Datatec shares.
NEWS ANALYSIS BY IT EUROPA
Westcon has employed an acquisitive strategy to broaden its capability in next generation technology areas and also strengthen its attempt to capitalise on the high growth Latin American market. The benefits for Westcon are clear: The distributor obtains a stronger foothold in this target market and beyond, which is key to its objective of becoming a dominant player in these regions as it seeks new growth opportunities.
From a technology perspective, the deal is especially significant for Westcon, further entrenching its cloud and security strategies by leveraging Afina's established vendor relationships, potentially resulting in significant expansion in target growth regions and signalling its ambitions to capture and dominate existing and adjacent markets.
The acquisition will undoubtedly have an opportunity impact at the partner level. The combination of Westcon and Afina will enable partners to get a slice of the burgeoning IT markets which are experiencing robust growth, perhaps enabling them to move from being niche players to becoming a part of the wider converged story over the coming years. We believe that the Afina acquisition is Westcon's next natural step to succeed in its regional objectives.
"Customers require more from a UC distributor than simply product stocking and shipping. They want a distributor that helps to drive innovation as a technology enabler."
Steve Harris, Managing Director, VCOMM