Leeds dealer ICM Computer Group has made its first acquisition since it floated on the London Stock Exchange in May 1998, with the purchase last week of Merit Support for #163;300,000.
According to Colin Burke, administrator at Milner Boardman, ICM approached it shortly after Merit Support went into administration on 12 July. A creditors' meeting was held on 10 August at Great Barr, West Midlands.
Burke said: "Some loose ends needed tying up. A company's voluntary arrangement (CVA) has been approved. ICM showed early interest, and the only thing it's not receiving is the debt, which is just a technicality. The creditors' meeting was to apportion the money."
He added that he did not believe there would be any redundancies at the reseller. Based in Halesowen, Merit was established in 1985. The latest results for the year ended 31 December 1997 showed the company made a profit of #163;181,000 from a loss of #163;240,000 in 1996.
Barry Roberts, chief executive of ICM, said: "Within the industry, Merit is highly respected and it boasts an enviable list of blue chip customer relationships.
"This is our first acquisition since flotation and it fits perfectly within our business model and enhances our capability," he added.
One industry observer said: "It is a very nice deal for ICM. Merit has been around for a long time but in the past three years the company has tended to have problems in the summer period. When the reseller went into administration, many believed that it would turn the business around in six weeks."
ICM's share price closed at 241.5p last week. The reseller has recently experienced a modest increase in its turnover in the six months ended 31 December 1998.
Despite slow revenue growth of about seven percent over the previous year, during the second half of 1998, ICM managed to increase its pre-tax profit by 26 percent over the 1997 results, with margins rising across all business units. The reseller had enjoyed year-on-year revenue growth by 22 percent.
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