Westcon Adds Money Muscle

Distributor Westcon Group North America has beefed up its ability to offer improved terms to VARs and expand its business with a new five-year $150 million working capital facility.

The deal, which includes improved financial terms at prime minus rather than prime plus rates, will be used to finance the operations of Westcon Group’s three U.S. operating divisions—Comstor, Voda One and Westcon—as well as Westcon Canada.

“This transaction is a coming-out party for Westcon Group North America,” said John O’Malley, vice president of finance and CFO for Westcon Group, Tarrytown, N.Y. “Westcon Group North America has been rewarded for the strong performance of the business. This deal was done on improved terms based on the strong performance of the management team.”

The financing provides the North American team, led by Anthony Daley, senior vice president and general manager of Westcon’s Americas, with the “flexibility, authority and autonomy” to provide better terms to VARs, O’Malley said.

The new financing is a reaffirmation of Westcon Group North America’s solid, sustainable business model and long-term relationships with both VARs and vendor partners, he said. Westcon Group North America has had relationships with its foundation vendors—Cisco Systems, Nortel Networks, Avaya, Check Point Software Technologies and Nokia—for an average of 10 years, and with its top 10 VARs for an average of nine years, O’Malley said. Tom Kirk, vice president of Corporate Networking Inc., a Worcester, Pa., solution provider, has partnered with Westcon for 11 years. “We have grown over the years at the same time Westcon has grown,” he said. “Westcon has, 100 percent of the time, given us the ability to meet whatever demands there are from our end users. They stand behind us. You can’t get that from anyone else in the industry.”