Avnet bid for Horizon sparks 2008 predictions

As the dust settles on Avnet’s bid for Horizon Technology Group, insiders predict 2008 is set to be a landmark year for distribution consolidation.

As revealed by CRN Online, Avnet has tabled a 2101.3m (£80m) all-cash offer for the London- and Dublin-listed distributor, which counts Sun, EMC and Oracle among its key brands. The deal is reputedly set to close in late June.

Onlookers immediately questioned how the deal would be received by Horizon’s UK management, which formed the UK business under the Clarity name in 2000 after breaking off from Sun distributor tplc.

It is understood that Horizon UK’s four directors were not informed of the board’s plans until the day of the stock exchange announcement.

However, Simon Welch, marketing director at Horizon UK, told CRN: “The management team and talents within Horizon UK need to be confident that they are working for the right organisation. But conversations are happening now and
it bears out that we are.”

Sukh Rayat, vice president of sales in EMEA at Avnet Technology Solutions Europe, said it was too early to say what Avnet would do with Sun’s smaller Irish SAP integration arm.

He also denied that overlaps in distribution would prompt heavy cost-cutting. “The integration of sales organisations will take place, but right now I do not see much conflict. Sun resellers are aligned to a distributor for a period of time, so there is not much overlap of accounts there.”

Andy Gass managing director of broadliner Computer 2000, said: “2008 shows all the signs of being one of the biggest ever years of distribution consolidation.

“I would not be surprised to see the number of active distributors come down by 20 or 30 per cent this year; people are having to get very big, or very niche.”