Westcon Group is considering an IPO during the first half of 2004, according to parent company Datatec Ltd.
Executives at the Tarrytown, N.Y.-based distributor declined to comment on a pending IPO.
Westcon Group was founded in 1985, and its majority owner since August 1998 has been Datatec, a Woodmead, South Africa-based company that also owns Logicalis, a Bloomfield Hills, Mich.-based solution provider, and Mason, a telecom and convergence services company based in Manchester, U.K.
Datatec issued a statement on its Web site Tuesday cautioning shareholders that a Westcon Group IPO in the first half of 2004 could have an effect on the company's South African shares. Datatec shareholders "are advised to exercise caution when dealing in the company's shares until a further announcement is made," according to the statement.
Westcon Group includes Westcon, Comstor and Voda One divisions that sell to Nortel Networks, Cisco Systems and Avaya-focused solution providers, respectively. Through Datatec's first two fiscal 2004 quarters, Westcon Group's revenue was $860 million, up 8 percent from $795 million in the year-ago period.
Westcon Group filed an S-1 for an IPO in January 2001. The company backed off when it determined the market was not right, sources said. If the company decides to complete an IPO this year, it would follow closely in the footsteps of Synnex, which went public last Nov. 25. Synnex's stock has increased 30 percent to $18.86 per share after its $14.50 initial offering.
"Valuations are getting a bit full, but clearly there is still some upside to the companies in [the distribution] universe," said Brian Alexander, vice president of equity research at Raymond James & Associates. "And there is clearly increased appetite for new public offerings."
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