Datatec continues its UK buy-up bender

South African distributor Datatec is to splash out as much as £41 million on networking reseller Satelcom, continuing its UK shopping spree. Datatec will make an initial payment of £14 million, with the balance depending on Satelcom’s pre-tax profit performance for 1998-2000. Satelcom founders Brian Jacobs and Ian George each stand to pocket up to £16 million from their 40 per cent stakes. Around two-thirds of the 115 staff at the firm - based in Ascot, Berkshire - own shares worth around £8 million. The acquisition will provide big customers through Satelcom’s managed network services offering. Its clients currently include Marks & Spencer and Bank of Scotland. It also adds to Datatec’s existing cache of UK companies, including Logical, Blueprint and Network SI. Satelcom specialises in high end network management which keeps tabs on networks from Satelcom’s head office. It will be renamed Logical Network Services. Jon Davies, Datatec corporate marketing director, said: "The four businesses in the UK will together complete the end-to-end support programme. We can install, manage and now run networks for corporate customers." Davies added that Datatec wanted to copy the UK model throughout Europe, especially in France, Germany, the Benelux countries, Scandinavia and Switzerland. The acquisitions precede a possible floatation on the London Stock Exchange or on Nasdaq. Over 75 per cent of Datatec’s business now comes from outside South Africa. The company therefore needs to attract international investment, and thinks a listing in the UK or US will be more attractive to investors. Datatec floated in Johannesburg in 1994, and has a market value of £750 million. Europe is responsible for around 40 per cent of the revenue. ®