Simms International acquires KH Distribution

IT components and accessories supplier Simms International has purchased KH Distribution, a major distributor of Apple products and accessories.

Danny Moore (pictured), managing director, Simms International said the company had been on the look out to purchase another distribution company as a way to enter the retail market.

“At the time, we weren’t even looking at KH because it didn’t fit our profile. However a business broker brought us together and the distributor had a synergy similar to Simms,” he said.

Brisbane-based KH Distribution was established 10 years ago by husband and wife team Keith and Aine Rice.

Keith Rice said KH wasn’t planning to sell, however the distributor experienced massive growth since the advent of the iPod.

“We struggled [with] growing pains and with the ability to come up with working capital when we decided to get together with Simms,” he said.

“KH didn’t have the finances or cash management to [stay] successful and needed help. Also I’m now 57 years old and the Simms offer gives my wife and I the opportunity to retire.”

Simms was also born in the Apple channel, selling memory for Apple personal computers in 1995. Apple’s founding MD in Australia David Strong is chairman of the Simms Board, said Moore.

“I believe this is a good opportunity for Apple and we will be pushing Kingston’s memory products into the Apple channel,” he said.

However an Apple channel insider said entering into the Apple channel was unwise at this time. The insider said Simms might be looking into becoming an Apple master distributor.

Moore denies the statement: “We don’t believe the [Apple channel] is heading [into having one main distributor]. [Apple] has three good distributors on its list, IT Wholesale, Express Online and KH Distribution,” he said.

Rice will continue to work in the business for six months while the transition to Simms is implemented.

The merged business will have a combined staff of about 50 and KH will continue to operate under the current name until the businesses are formally brought together at a later date, said Moore.

“For the present nothing will happen to the staff. The two businesses will remain separate, with some integration in the backend,” he said.

“In the future some jobs will be integrated,” he said.