ASX-listed Wintech Group will look to grow Westan following its acquisition of the IT distributor last week.
According to an ASX statement, the purchase price, on a willing-buyer-willing-seller basis, was settled on Westan’s net tangible asset value, which is $5 million. The share sale was completed through Western Australia-based investment holding company, Dayspan Holdings.
Westan founder and owner, Victor Aghtan, who is 66 years old, said 20 years in the industry was long enough. After signaling plans to retire, he was approached by a third-party representing Wintech.
“Wintech was looking for a business in the IT space, so it was a good fit,” Aghtan said. “I have the infrastructure set-up including four branches around Australia. I felt the proposal was appropriate without being too disruptive.”
The distribution business will remain under the Westan brand, manned by its 48 staff. Aghtan added there were no plans to integrate Westan with Wintech’s distribution subsidiary, MTD. The company will continue to be managed by Kamil Aghtan.
“Wintech is very keen to make sure the current operations are maintained and there’s no disruption. They’re also keen to grow the company, whereas I have been downsizing over the last few years,” Aghtan said.
According to the ASX statement, Westan’s total pre-tax earnings in the nine months to March, 2009 were $677,000 off revenue of $37.6 million. The distributor’s key vendor partners include Samsung, Western Digital, Epson and Infocus.
Dayspan director, HK Tang, was confident Westan continued to have a place in the market despite the tougher economic and market climate. The decision to acquire Westan is part of a broader acquisitions strategy for growth, he said. “Westan’s revenues over the past three years have been consistent at around $50 million, so we think we will be able to maintain market share,” Tang said. “Victor chose not to take up a number of product as he wouldn’t be running the business. So there are certain opportunities for additional vendors, as well as products to grow the business.”
Tang said there was little overlap between MTD, which it acquired several months ago, and Westan. “We will run these businesses as separate entities – the customer base and vendors are different,” he said. “MTD is Melbourne-centric, whereas Westan has a national presence.” Aghtan planned to devote more time to his position on the board of directors of ASX-listed integrator, Hyro.
He is also in the process of building a new house in Victoria.
The news of Westan’s sale comes just weeks after its business partner, Ray Twee, revealed it had sold the Westan South Australian operations to Hyka.