Deals done and dreams dashed in Australian distribution

A year of deals and dramas

This month's blockbuster deal between Tech Data and Avnet caps a year of significant movement in the distribution space in Australia and internationally.

2016 has brought deals among many of the largest distributors, including Ingram Micro, Avnet, Distribution Central and Arrow. It hasn’t all been smooth sailing, though, with a few insolvencies across the sector.

We recap some of the biggest shifts in the distributor landscape over the past year.

Click here for original story

Distributor PCRange went under

11 January

Adelaide-based networking distributor PCRange had been in business for 16 years, its chief executive Raaj Menon having started the business by selling routers out of his home in 2000.

After “plummeting sales” in 2015, Menon was hopeful that cutting several staff, including support manager Quentin Smith, would help the business pull through. Come January, Tarquin Raoul Koch of Anthony Matthews & Associates had been appointed as liquidator.

Melbourne-based Summit Group stepped in and bought PCRange’s VoIP businesses SIPTalk and ObPBX at the end of the month.

Click here for original story

Leader bought Altech's assets

15 January

Altech Computers fell into voluntary administration at the tail end of 2015 and a report from the first creditors' meeting in January revealed the company had debts as high as $9 million.

ASIC documents revealed the company had suffered financial problems for some time. Cashflow was down to $319,000 at the end of the 2014 financial year and the staff headcount across the distributor’s five Australian warehouses had slipped from 180 to 108 in the year to June 2014.

Altech assets were acquired by Leader Computers in mid-January, including Altech’s intellectual property, database, systems, stock and a number of resellers. A number of fixed assets were left to the bank. Leader have since established a new assembly and service centre in Western Australia.

Click here for original story

Transition Systems was acquired by WhiteGold buyer

13 January

Headquartered in Singapore but with offices in Sydney and Melbourne, Transition Systems was bought by France-based Exclusive Group, marking the French firm’s biggest ever buyout and bringing its annual revenues to more than €1 billion (A$1.5 billion).

The acquisition followed Exclusive’s purchase of Whitegold, now known as Exclusive Networks Australia and New Zealand, and strengthened the company’s push in the region.

Click here for original story

Ingram Micro acquired Connector Systems

3 February

In February, trans-Tasman distributor Connector Systems was bought by Ingram Micro for an undisclosed sum.

Connector Systems was founded in New Zealand in 1979 and branched into Australia when it bought Techplus Distribution in 2012.

Specialising in cabling, networking, wireless, security, storage and backup, and voice, Connector brought 15 vendor partners to Ingram as part of the buyout, including Ruckus, Cyberoam and IGEL.

Click here for original story

Ingram Micro was acquired by Chinese buyer for US$6bn

18 February

Ingram Micro was bought by China’s Tianjin Tianhai in a deal valued at US$6 billion (A$7.8 billion) that saw Ingram join HNA, a Fortune Global 500 enterprise group.

The deal gave Ingram access to HNA Group’s global logistics capabilities, in addition to opening up the lucrative Chinese market. The transaction had the unanimous support of the boards of both Ingram Micro and Tianjin Tianhai. The deal’s value represented a 39 per cent premium over Ingram’s average closing price for the 30 days ending February 16, 2016.

However, the acquisition stalled in July when the Shanghai Stock Exchange wrote to Tianjin Tianhai asking for clarification on the deal and how the firm would fund the purchase. In August, Ingram announced the purchase-by date had been extended to 13 November.

Click here for original story

Mega Merger for Harris Tech, Anyware, Shoply

3 March

Online tech retailer Shoply announced it would acquire 100 percent of niche IT distributor Anyware Technologies, including Harris Technology, the reseller Anyware bought from Wesfarmers in 2015.

Under Wesfarmers, Harris Technology closed its shopfronts but continued to sell online and offer fulfillment through its sister company Officeworks in 2014. Shoply’s brands included electronics retail stores Warcom and eStore, which it bought from City Software’s Lorenzo Coppa in 2015 for $1.8 million.

Shoply began trading as Harris Technology Group Limited after the merger was finalised in July.

Click here for original story

Arrow acquired Distribution Central

14 March

Certainly the biggest Australian distributor deal of the year, Sydney-headquartered Distribution Central was bought by Arrow Electronics, a NYSE-listed company and one of the largest distributors in the world.

The deal with Arrow came only weeks after Distribution Central was revealed as a major winner of Hewlett Packard Enterprise’s distribution tender.

Scott Frew established Distribution Central with Nick Verykios after selling LAN Systems, which he also founded, to global giant Westcon in 2000.

Click here for original story

Pursuit Performance folded after being cut out by vendor

23 March

Having a single-vendor business strategy is precarious. No better was this demonstrated than by the closure of wearables distributor Pursuit Performance, after its client, heart rate monitor maker Polar Revolution, decided to go direct to market.

Pursuit announced that, after 30 years of being Polar Revolution’s sole distributor in Australia, it would cease operations. The company told CRN that Polar would establish its own subsidiary in Australia.

The distie said despite the disappointment, it conceded a one-client strategy was a weakness and that it had never taken its vendor for granted.

Click here for original story

Hills Limited shed its health business

13 September

Earlier this month, Hills Limited announced plans to spin out its Hills Health Solutions business in a merger with health technology provider Lincor Solutions to become Lincor Limited. Stockbroker Shaw & Partners was tasked to raise $30 million to list the new company on the ASX.

If the merger meets all the required conditions, including shareholder approval, it will be led by current Lincor Solutions chief executive Chris Cashwell.

Hills’ health business supplies and installs health technology solutions and patient entertainment systems to hospitals and aged care facilities. The company has been a Lincor Solutions distributor since 2014.

Click here for original story

Avnet acquired by Tech Data for US$2.6 million

20 September

After 12 months of significant shifts in the industry, undoubtedly the biggest distributor acquisition of the year so far has been Tech Data dropping US$2.6 billion (A$3.45 billion) on Avnet’s Technology Solutions business. The deal is poised to reshape the value-added distribution landscape and, after years of speculation, bring the US-giant to Australia.

Tech Data chief executive Bob Dutkowsky last week told CRN his company wanted to invest in the Asia Pacific, and Australia would be the base for that.

The combined company hopes to help customers capture business around next-gen tech such as converged and hyperconverged infrastructure, as well as security, analytics and the cloud.

Click here for original story