The board of Principal Distribution has sold almost half the company to its management in a bid to attract key vendors and turn around its financial situation.
A management team led by Jon Pritchard, managing director of Principal, has taken a 49 per cent stake in the North Yorkshire distributor. Miles Naylor, finance director, and Tim Noyes, business development director, are also involved in the buyout. Terms of the deal were not disclosed and it was unclear whether the company had received a cash injection.
Rod McMillan has stepped down as chairman and chief executive of Principal, taking the role of non-executive chairman and giving the management team the option to buy the remainder of the organisation from him.
McMillan said in a statement: "Now that Principal is established as a sector specialist with an improving trading record, it is time for our management team to take over more of the ownership."
Pritchard added: "We are extremely enthusiastic about Principal's future and are poised to develop further and expand our business into quality areas."
One industry source said the move would increase the loyalty of the company's senior management. "Principal has been treading water since the buyout of P&P in 1996. It lost its direction after losing the Symantec contract, which was a key asset. It needed to secure a decent franchise quickly, but this move may be too little too late."
Principal is suing Computers Unlimited and its business development director Alan Clarke. The rival secured the exclusive contract to distribute Symantec products to the Macintosh market in March (PC Dealer, 9 June)
Meanwhile, Computers Unlimited has signed internet services vendor Netopia, which was previously distributed exclusively in the UK by Principal.
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