Miami-based distributor CHS Electronics is continuing its dominant march through Europe after mounting a $119 million bid for a Norwegian firm.
Last week, CHS made a bid to purchase Norwegian distributor Santech Micro Group. Over the past three years, Santech Micro Group?s sales have achieved an annual growth rate of 51 per cent.
According to Claudio Osorio, chairman and CEO of CHS Electronics, the purchase will mean that CHS will be the largest distributor in Scandinavia, with a turnover of nearly $1 billion next year, as well as the biggest in Europe.
The sale is expected to get the go-ahead from the shareholders within the next two weeks after Santech?s board of directors recommended shareholders accept the offer. CHS already has binding commitments to sell at the offer price from owners of 34.3 per cent of Santech?s shares.
Last week, CHS achieved a gross margin of 7.4 per cent in its Q2 results thanks to higher vendor rebates on completion of its share offering.
In its Q2 ended 30 June, the distributor reported sales of $947 million and net profit of $6.4 million. This compares with turnover of $316.5 million and net profit of $1.7 million for the same period last year.
CHS completed its share offering last month after it offered 13 million shares of common stock at the price of $31.75 per share, raising $394 million, which the distributor said it would use to fund further acquisitions.
CHS has been increasing its European presence since it purchased Merisel?s European operation in September 1996. It also recently bought Swiss components distributor Karma International.
CHS, which does not sell any products in the US, is expected to hit $4.5 billion sales this year and $6.5 billion in 1998. It plans to enter the US market eventually, probably through a merger, but the distributor claimed these plans are not immediate.
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