The sale of Australian IT distributor, Westan, to ASX-listed player, Wintech Group, has fallen over after the latter’s distribution arm, Magnafield Technology Distribution (MTD), slipped into receivership.
“The deal was not completed and there was some due diligence to be done. In the current state the deal has been called off,” Aghtan said. “It is going to be business as usual until, if and when we find another partner. We are going to re-evaluate the entire situation.”
In a statement to the ASX, Wintech announced Deloitte Touche Tohmatsu’s Timothy Bryce Norman had been appointed as receiver and manager for MTD. The appointment of receivers followed notification by MTD’s bank it was in default and required to pay a little over $5 million immediately. Wintech (ASX: WTG) also requested a halt in trading on the ASX.
The failure of the original sale – which was set to go through on a willing-buyer-willing-seller basis for the purchase price, based on Westan’s net tangible asset value, of $5 million – means Aghtan will now shelve plans for retirement.
“The roses are going to have to wait,” he said. “I think, basically, we will refocus on the business rather than looking at this kind of merger and acquisition. We’ll probably let it happen when it happens. For right now it is all hands on deck and we want to drive this ship onwards.”
This latest news rounds out two topsy-turvy months for the distributor. In early June, Westan was forced to issue a denial it was selling up and exiting the IT distribution market after industry reports surfaced that the Melbourne-based distributor closed operations in South Australia and was looking to sell up
In an interview with ARN at the time, Aghtan said IT distributor was pulling away from its traditional whitebox market, but said it would continue to focus on distributing hard drives, monitors and CE products for the foreseeable future.
However, business partner, Ray Twee, revealed it had sold the Westan South Australian operations to Hyka.
Not longer after came the news Westan would be sold to Wintech. At the time the acquisition was announced, Westan’s total pre-tax earnings in the nine months to March, 2009 were put at $677,000 off revenue of $37.6 million. The distributor’s key vendor partners include Samsung, Western Digital, Epson and Infocus.
Deloitte's Norman confirmed he was appointed as a receiver and manager of Magnafield Technology Distribution on July 29.
“The receivers are now in a process of investigating the affairs of the business and collecting the proceeds of the debtor book that is owing,” he said.