Digital Systems reseller ESS plans to buy two tiered Var competitors as direct Digital dealers scramble to add volume and value to their business to guarantee accreditation.
David Hulme, ESS divisional director, revealed that his company is negotiating to buy a Digital dealer in the north of England with a turnover of #3 million, and a South Eastern Digital Var with sales of around #6.5 million. He said he could not name the firms involved.
'There are two ongoing situations that could expand our business. We're finding they have accounts similar to ours in different geographical locations. They have good business and solid bases of customers.' John Nicholson, channels manager at Digital Systems, said mergers and acquisitions in the Digital indirect channel are a consequence of Digital's policy to cut the numbers of direct dealers. 'They need critical mass and added value. ESS have proved themselves to have an eye for a bargain,' he said.
As the largest part of Leeds-based holding group Integrated Technology Europe (ITE), ESS would boost ITE's sales over #30 million if it completes the deals. Hulme hopes both acquisitions will be finalised by ITE's year end on March 31.
'The way Digital's accreditation is going, we have a greater opportunity to retain our direct status by buying. To maintain stockholding and accreditation, we need volume,' he said.
ESS's move follows Hawke Systems' swoop for Nexcom, revealed in last week's PC Dealer. ESS also bought Scottish reseller Channel One last year (PC Dealer, 15 November 1995).
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