French distributor Metrologie has conceded that it cannot competet compete with the big boys. with big European players and is looking to strike a merger or an alliance with another company.
The company confirmed last week that it would make a loss of FFr50 million in 1997, according to initial estimates, despite a previous prediction by Metrologie chairman Alain Fraiberger that the company would break even in 1997.
The distributor's turnover was lower than expected with a total of FFr5.15 billion against last year's figure of FFr3.7 billion.
As a result of the company's figures, Metrologie also admitted it needed to pair up with a major player to compete with big European distributors such Computer 2000, Ingram Micro and CHS Electronics.
In a statement, Metrologie said the large US companies have weakened local enterprises, which do not have a turnover of 10 million, to 15 million francs. Fraiberger estimated that Computer 2000 had a turnover of 25 million francs.
Talking to PC Dealer, Gerard Morhange, financial vice president of Metrologie, denied the distributor was up for sale but refused to confirm whether any talks were actually taking place.
He said: 'The critical size was between FFr2 billion and FFr4 billion in Europe, now it is FFr5 billion. As last year's revenue was just FFr1 billion, it raises the question as to whether our size is able to compete with the major players.'
Several sources claimed that Metrologie had held initial talks with CHS Electronics, Westcoast and Techdata but that nothing had been agreed.
One source said that major shareholder Apax, a venture capitalist which has a 60 per cent stake in Metrologie, was viewed as a poison pill since it would have to agree to the acquisition first.
Bob Grindley, marketing manager at Metrologie UK, claimed that despite the parent's results the UK operation had experienced a 30 per cent increase in sales. The company has restructured since the appointment of Rob Johnson as managing director in October 1997.
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