Datatec will have a 55% shareholding and African Legend Technologies will hold the remaining 45% in the newly merged entity, which is to be known as African Legend Indigo.
 
African Legend Indigo will include Datatecs RangeGate and the two African Legend Technologies businesses, African Legend Indigo and African Legend Solutions
 
Westcon AME, Datatecs networking equipment distributor will continue to operate as a standalone business. However African Legend Technologies will take a 45% shareholding in Westcon AME.
 
The comparable size and nature of the merged operations is such that no vendor finance will be required to facilitate the deal. The proposed merger is subject to competition commission approval.
 
African Legend Indigo will be led by CEO, Michael Jacobus, who has led African Legend Indigo for the past three years. Key African Legend and Datatec executives will have positions on the new board.
 
According to Jens Montanana, CEO of Datatec, the merger will create a truly black empowered ICT company.
 
We are excited about this deal on a number of levels. The merger will create an IT company that is 45% black-owned, which is significantly more than the ICT Charter calls for, and we expect it to add significant shareholder value by providing us with the critical mass we need to take the new business to the next level and to consistently achieve the sort of growth recorded by Datatecs other operations in the US, the UK and Europe over the past 12 to 18 months.
 
According to Mashudu Tshivhase, chairman of African Legend Indigo and African Legend Technologies, the fit between the African Legend companies and RangeGate is excellent. Culturally there are great synergies, he says. And there is a limited overlap in our client base which presents great opportunity for cross selling our services across the business. Through the merger we will build a strong organization that will be in a position to make a positive contribution to bridging the digital divide throughout the whole African continent.
 
In May Datatec posted record revenue and profits for its financial year to February 2006. The company achieved an 18% increase in revenue to $2,98bn, significant growth in operating profit to $69m and its headline earnings rose by 650% to 26,91 US cents.