Channel left reeling as Equanet sold to Dixons

Months of speculation came to an end last week, as VAR Equanet was acquired by Dixons Stores Group (DSG) for an undisclosed amount, a move that sent shockwaves throughout the channel.

Equanet will retain its name and branding but will now become part of DSG’s business arm, PC World Business (PCWB).

Equanet had been in its review period with its venture capitalist (VC) backers and speculation had grown as to whether the VC would provide funding or whether Equanet would be sold. Sources close to the company told CRN that no job cuts or changes to staff are expected. CRN understands that Paul Barlow will remain as managing director of Equanet.

Although channel players said it was a good move for both companies, many questioned what the effect would be on Hewlett-Packard (HP), Equanet’s prime vendor.

“Equanet will gain the Gcat government accreditation that PCWB has and its Microsoft Large Account Reseller status, and PCWB will be able to hit new markets with the services portfolio from Equanet. But HP has got to be wondering what will happen and whether it will start to sell other, competing vendors,” said one source who requested anonymity.

Peter Critchley, strategy director at Morse, said he thinks HP will be looking at the deal closely. “HP will want to find out the real intent behind the deal and any ramifications. There are always changes in the channel, not least at HP itself,” he said.

Alistair Edwards, analyst at Canalys, said: “This is a very clever move for PCWB, it will help to reshape the company and help it change from the perception of it being a product-focused business.

“Equanet’s customer base is in the mid market so this will open up the sector for PCWB, which may have an impact on other mid-market players.”

Critchley said he doesn’t see this latest move as a threat. “I don’t think PCWB is going to be hitting the same services-lead deals that we are.”

Tony Davis, managing director at VAR Elcom, said: “This does open up the corporate market for PCWB, and it certainly seems to be chasing that number three position in the market.”