Floating on the crest of a wave

Now the dust has settled, let me congratulate Computacenter's masterful flotation campaign. The company's PR advisors deserve an award.

Computacenter peddled several themes, of which the most notable were: 'It's difficult to justify this in terms of a cash raising exercise', 'Thirty millionaires created','We're only doing this to create liquidity for our shareholders' and 'Ain't we a marvellous company'.

The news that founders Phillip Hulme and Peter Ogden were donating two-thirds of the money raised from their stock sale to charity was a particularly good touch (which is, of course, not to decry their munificence).

Even better was the complete absence of any mention of GE Capital IT Solutions in discussions of Computacenter's prospects in the national press.

This stock is not one for share pickers who look forward to their twice-yearly dividends. Which is why Computacenter's advisors, Goldman Sachs, decided on a placing with sophisticated and rich institutions.

Computacenter's new shareholders are placing an awful lot of faith in the company's ability to generate capital appreciation.

And the quickest way to deliver this is through mergers and acquisition activity - not the skills for which Computacenter, the organic growth reseller par excellence, is noted.

Nevertheless, I suspect the company will accelerate its German infrastructure through acquisition.

The fragmented French reseller market also looks ripe for consolidation - although the incentives for Computacenter (a top 10 reseller in France) to acquire in this particular country are less compelling.

Computacenter never had any problems raising money in the past - when it was a private company. But public status - and expensive paper - will do it no harm if it is to build substantial operations abroad.

Computacenter's paper is costly, and the company was no doubt helped by its masterful flotation timing. The company was able to take full advantage of the recent price inflation of scarce UK IT stocks.

A couple of years ago, Computacenter's stock market valuation of #1.3 billion - roughly equivalent to turnover and a price-to-earnings ratio in the early to mid 30s - would have been dismissed as laughable.

That is especially true for a company whose turnover still relies so heavily on low-margin PC sales. Computacenter may be the best-run reseller in Europe, but is it worth the price put on its head?

Disney, with Coke and McDonald's - the world's top three consumer brands - trade on forward earnings of 26 - and this is in the even frothier US stock market.

Disney or Computacenter ... which do you think is the safer long-term bet?

Drew Cullen is a freelance IT journalist.