Distributor Propalms has acquired Arc Technology for an undisclosed amount, and announced that the acquisition of another distributor is on the way.
Filtering software specialist Propalms, which was formed in August 2001, financed the deal itself. The combined firm will be known as Arc Technology.
Owen Dukes, managing director of Propalms, said: "It is a better known brand name among resellers and we want to retain it."
The takeover of Arc sees the distributor, which traditionally operated in the URL and mail filtering market, move from selling one product to more than 20.
Propalms will add divisions in the connectivity, database, server management and IT support markets, and will increase its reseller base from 40 to over 300.
Dukes said that the company will grow from £2m revenue last year to £20m in the next two years through a mix of acquisitions and organic growth.
"We plan to grow nationally and internationally and are currently in negotiations to acquire another UK distributor," he said.
Ian Kilpatrick, managing director of distributor Wick Hill, said that Arc has a good technical reputation and merging specialist distributors is a good expansion strategy.
"Smaller players often struggle, so it makes sense to merge," he said. "If this is someone putting together a number of different specialists it could be a success, particularly if they buy people with good reputations."
Arc, which had a turnover of £8m last year, was formed by the merger of IP Connect, formerly Easy IP, and UniDirect in September 2002.
In late 2001 Easy IP's assets were frozen and access software vendor Attachmate stepped in to support it as it relaunched as IP Connect.
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