A number of cash-rich resellers are waiting in the wings to snap up struggling competitors, according to the latest research by Plimsoll.
The market watcher claims that one in seven UK resellers could change ownership in the current economic climate as a "wave of takeovers" sweeps the industry.
It has identified 172 resellers with a "sizeable" cash reserve on their balance sheets.
David Pattison, analyst at Plimsoll, said: “I am sure any director worth his salt would agree that in the current climate, there are too many companies chasing too little market.
“With many directors eyeing the exit doors and highly leveraged buyouts consigned to history for the time being, it really is a buyer's market out there for cash-rich companies.”
Plimsoll said one reseller (which cannot be named) even has a £35m cash pot ready to strike.
Pattison added: “These companies are now in a position to buy up large chunks of market share at rock-bottom prices and make that money work for them. They must be like kids in a sweet shop at the moment – all those distressed competitors available at a fraction of their true value.”
He said the UK reseller market is still regarded as one of the UK’s most fragmented sectors, with 697 companies reaching £1m turnover and 145 primed to be taken over.
“Buying one of these businesses represents a massive opportunity for someone to enhance their share of the market. Either way, the market is set for a wave of takeovers in the coming months.”
Similarly, the analyst forecast a consolidation-filled distribution landscape in the UK, with 28 firms painted as acquisition targets, in a market of 143 companies with a £1m-plus turnover.
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