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12 Dec 2008
One of the founders of distribution group Fayrewood has stressed he will not invest further in the channel after setting up a new business to buy the company.
David Kleeman has established Letchworth Investments as a mechanism to return value to Fayrewood shareholders after Fayrewood sold its last remaining business, Interface Solutions, to SCH in August.
Letchworth’s offer values Fayrewood, which has £36.6m in the bank, at £29.3m. Shareholders are set to vote on the scheme in January.
Further reading
However, Kleeman emphasised that Letchworth was merely a way of releasing cash to shareholders and would not be investing in channel companies.
“We sold all our businesses in Germany, France, the UK and Spain at the right moment,” he said.
Letchworth will retain £9.1m cash in connection with a number of claims against the company.
Warren Hudson, volume products director at ETC, SCH’s distribution arm, said: “Fayrewood has been well motivated to exit IT distribution for the past 18 months and there is no doubt it is a tough market. Even if Letchworth gives it a route back into the market, IT distribution probably would not be its chosen route.”
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