Storage distributor CMS Peripherals has hit the acquisition trail for the first time as it strives to become a €250m-turnover firm.
In a deal concluded this morning, the Anglo-Irish distributor has snapped up rival CCI Distribution for an undisclosed sum, nudging its annual sales up to €145m (£128m).
According to recent filings with Companies House, CCI posted losses of £130,000 on revenue of £32.8m in its most recent year.
Speaking to ChannelWeb, Frank Salmon (pictured), managing director of CMS Peripherals, said the acquisition – the first in the firm's 23-year history – is part of the distributor's three-year growth plan to become a €250m-revenue company.
"In the past two years, we have grown the business by 10 per cent [each year]," he said. "By joining forces with CCI, we expect that will increase to 20 per cent for the next three years."
Despite CCI's 2010 financial loss, Salmon said the firm has no plans to strip out costs from its new purchase by making redundancies or closing offices.
"In the foreseeable future there will be no job losses and having an office in the North of England is very important to us, so there are no plans to change things there," he said.
CCI's managing director, Paul Roughley, will stay on to oversee the running of the company and has been installed as a board member at CMS' holding company. The CCI brand name will be retained.
As a result of the merger, CMS now employs more than 175 staff, spanning four offices spread across the UK and Ireland.
CMS claims the deal has made it the UK and Ireland's largest independent storage distributor in terms of revenue, staff and brands stocked.
"This deal will put us way ahead of any other storage or peripherals distributor in the UK, including Hammer and Northamber," added Salmon. "Our real competition now is the large, global broadliners."
He also revealed the firm is planning to make a second acquisition in 2012, adding that any potential takeover targets will need similar attributes to CCI.
"We chose CCI because we have minimal vendor and customer overlap, despite specialising in similar technologies, and we are confident that combining the two business will lead to greater growth," he said.
Paul Matravers, sales director for storage products at rival distributor Hammer, said: "Despite this acquisition, Hammer will remain the number one value-added storage distributor in the UK and Europe.
"Both CMS and CCI have a predominant retail focus, and therefore we only have marginal similarities in our vendor portfolio and customer base, and see no reason why our position will change," he added.
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