US mail-order firm Insight Enterprises has bought UK-based Choice Peripherals, along with an 85 per cent stake in Choice's internet service provider, Plusnet Technologies, for #1.7 million cash and #2 million in Insight stock.
As exclusively revealed in PC Dealer (11 March), the acquisition has spearheaded Insight's foray into the UK, which it plans to use as a base for expansion into Europe. It will also include a consideration contingent on Choice's profitability over the next three years.
Insight's first assignment will be to fine-tune Choice's corporate business, introducing US-style outbound selling methods that include phoning and prospecting for business over the internet.
According to Valerie Paxton, VP of corporate communications at Insight, the company's decision to buy into the UK and eventually snap up Choice was based on reports of an expansion of the UK PC market, coupled with an increase in business migration to the Web. 'The language was an attraction, as well as the fact that the UK may become a decentralised call centre for the EU,' she said.
Paxton added that Choice chairman, Paul Cusack, will continue to run the UK operation along with existing staff as part of the deal. She conceded that Choice operated on high turnover and very low margins, but said plans were under review to change that.
'We just have to add that little bit extra to help it move its model a bit. We will help it keep money in the company through technology, training and better hiring. It is so much like we used to be. It just hasn't seen how to save money yet,' she remarked.
Insight will bring its 50,000 product lines to bear on Choice's 2,000 products, but Paxton said the company was looking at product overlap.
In the US, Insight sources 20 per cent of its shipments through distributors Ingram Micro, Merisel and Tech Data, while 80 per cent of its inventory comes direct from vendors. However, in the UK, relationships with any distributors have yet to be determined.
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