Hardware firms top the acquisition list

Almost five per cent of the UK’s top IT hardware companies are prime targets for acquisition, according to analyst Plimsoll Publishing.

The firm assessed each of the UK’s top 1,000 hardware companies in its research and identified 52 that were ripe for the picking. Although the report, Easy Prey for Acquisition Hunters, did not name the companies, it revealed that the list included a mix of vendors, distributors and resellers, assessed on their overall financial strength. Plimsoll also marked each company on eight measures of acquisition appeal, such as above-average sales growth, its financial rating and the differential between its current and future values. No parent company controlled by a small group of directors and sales above industry average are also measures.

David Pattison, principal analyst at Plimsoll, said: “Acquisition never goes away, but many firms are now finding that good skills are hard to come by and it is often much easier to make an acquisition rather than develop the skills from scratch.

“Although some firms are growing rapidly, others are making a loss. They are the ones that are rich pickings for acquisitive firms and can be snapped up as a bargain.”

Nitin Joshi, a director at accountancy firm Vantis said he agreed with the research.

“There is continuing convergence at all levels, but I see this happening particularly in the distribution and VAR space,” he said.

“It is a busy time. In the hardware space in particular, it has been five years since corporates updated their hardware, and we have reached the point where that is going to pick up next year. Now is a good time for the stronger players to make an acquisition and organise their mergers and acquisition activity.”