The dark satanic rumour mill has manufactured a hell on earth yarn claiming that Westcon-Comstor is about to be sold off.
Datatec, the parent company of WestconGroup and Logicalis, has confirmed that it is in the process of negotiating “a material transaction” and the rumour is that its $4.9 billion distributor is going to be flogged off.
Datatec has told the regulators that the “material transaction” could have a material effect on the $6.5 billion company’s stock price if it is successfully completed.
Westcon-Comstor has not been doing that well over recent quarters. Westcon’s revenue fell 10 percent in the most recent filing period to $2.26 billion, with sales dropping everywhere except Asia-Pacific. The rumour is that it makes sense to off-load it, however no one is confirming anything. .
One of the reasons for the company’s woes is that its Latin America was sucking it dry and it was costing a fortune to transform the company’s business process outsourcing (BPO) practice.
Datatec spent $160 million in June 1998 to buy a 92.5 percent stake in WestconGroup and quickly expanded into Europe, which now accounts for 34 percent of the distributor’s overall sales.
