US giant Insight Enterprises will begin its offensive on Europe after securing the purchase of the UK's largest retailer, Action Computer Supplies, for £92 million.
As exclusively revealed in PC Dealer, (24 March), Action has been involved in negotiations with Insight for the past few months. The deal will be completed through a share transaction. It is Insight's largest acquisition and the company's second buy in the UK - it bought Choice Peripherals in April 1998.
The deal represents a 29.4 per cent premium on Action's share value before it announced it was in talks. The deal is due to be finalised by September subject to shareholder approval.
Tim Crown, president of Insight, revealed that this did not mark the end of the company's acquisition spree, adding: 'We are on our way to being the one pan-European player targeting the corporate SME sector.
This deal provides us with critical mass in the UK. Action, led by its existing executives, will be our platform for sales force and e-commerce expansion into Europe.'
He added that in the future, all the UK brands - Choice, Plusnet and Action - could be integrated.
Henry Lewis, chairman of Action, said: 'We will be forming a £1 billion company and our brief is to expand across Europe. We will also work closer with Choice.'
Steve Bennett, managing director of Software Warehouse, was shocked by the deal. 'We are in a fast and exciting market. It will mean more competition, but I would question what it will mean for Choice.'
Brian Pearce, analyst at IDC, said: 'It is an example of the on
going consolidation in the sector. US companies find the UK market very attractive. The growth of e-commerce is also a driver for this - global business still needs regional distribution.'
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