Dicker Data acquires Express Data

Dicker Data has announced the acquisition of the Dimension Data-owned Express Data, in a sign of major consolidation in IT distribution.

UPDATE: Read the full story from David Dicker and Dimension Data

The purchase price has not been disclosed. It covers all of Express Data's Australian and New Zealand assets, along with its 350 staff.

In a statement to the Australian Stock Exchange this morning Dicker Data chief executive David Dicker said: 

"The directors of Dicker Data Limited are pleased to announce that DDR has today entered into a share purchase agreement to acquire 100 percent of the issued capital of Express Data Holdings Pty Ltd. The acquisition includes both the Australian and New Zealand operations and Express Online.

"The acquisition is fully funded by Westpac Banking Corporation. DDR’s acquisition of Express Data Holdings Pty Ltd is scheduled to complete on 1 April 2014, subject to certain conditions being met."

Dicker Data shareholders will vote to approve the deal at an extraordinary general meeting in mid-March.

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Dicker Data has a market capitalisation of $133 million. Its stock hit $1 for the first time in February last year, and following the announcement today sat at around $1.04.

The locally owned distributor posted solid results for the 2012-13 financial year. 

Dicker saw an 11.7 percent increase in net profit after tax despite a fall in revenue of 1 percent to $451 million in the 12 months to 30 June 2013.

It listed on the Australian Stock Exchange on January 24 2011.

In annual results for Express Data Holdings Pty Ltd lodged with ASIC for the 12 months to 30 September 2013, the distie's revenue fell 8 percent to $798.5 million.

Its income also crashed, down 72.8 percent from $9.9 million to $2.7 million.

Getting out of distribution

Express Data is owned by Dimension Data, the world's largest systems integrator, which was acquired by Japanese telecommunications giant NTT in 2010.

Dimension Data said the sale marks its exit from the distribution space.

DiData chief execuitve Brett Dawson said: "The decision to sell the entity is part of Dimension Data Group’s strategy to sharpen its focus.

"While the resale of technology remains a core element of Dimension Data’s value proposition to clients, physical distribution is typically outsourced to specialist distributors.

"Express Data, a leading distributor in Australia and New Zealand, is our only distribution asset. The sale of the company follows our decision to exit the physical distribution market."

Dawson praised the management and employees of Express Data and Express Online. 

"Dicker Data will be gaining a great team of 350 employees who have built an outstanding business and have been fantastic contributors to Dimension Data over many years."

Next: Read David Dicker's letter to resellers