SCC is set to broaden its reach into the managed print world with the acquisition of £30m turnover Manchester-based VAR M2 Digital, CRN has learnt.
It is understood the deal has been struck and is likely to be signed off early next week. Sources have indicated they expect M2 managing director John Taylor to stay on and retain an involvement in running the newly expanded print business of the UK's largest privately owned reseller. Financial details of the pending acquisition are not known.
Four months ago SCC chief executive James Rigby indicated that, in the coming months, the firm would be "proactively seeking service-led acquisitions to expand the company's capabilities". One industry onlooker claimed the M2 deal makes sense as it will bring in additional expertise and be accretive to its EBITDA percentage.
M2's most recently available accounts, for the year to 31 March 2012, show sales grew about eight per cent to £31.3m, although operating profit was down almost five per cent to £1.75m. The directors' report characterised FY12 as another year of progress, picking out a 16 per cent spike in recurring revenues as a key achievement.
The report claims that M2 has grown into "one of the UK's leading managed print service companies".
"The focus on developing strong annuity revenue streams will remain a committed strategy of the business in the forthcoming period," adds the report. "The new financial year (FY13) has started well, with many new contract wins with strong annuity revenue in key target segment customers, and the business remains on course to achieve its targets."
As of the end of the 2012 fiscal year M2 had 178 staff. Its headquarters are in Stretford, with offices in London, Wakefield, and Glasgow. It is set to become SCC's second print services-focused acquisition in recent years, after Technical Support Group was bought by the Birmingham-based channel giant in 2011.
A buyout of M2 would mark SCC's first big M&A move since its sister company SDG was sold 15 months ago. The VAR indicated at the time that it would use the resultant £220m war chest to help fuel acquisitions, as well as investments in staff and facilities.
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