Beta Distribution has withdrawn from talks to buy rival Entatech, the distributor today confirmed.
In a statement to CRN, Beta confirmed that it had been in "detailed talks" with Entatech and its advisors about acquiring certain assets of the company, "but has decided not to pursue their interest".
"Although we have been in discussions for some time, information obtained during detailed due diligence meant we were unable to continue," Beta managing director Steve Soper stated.
"It is disappointing because this is an industry sector that we are extremely interested in and are looking to develop."
On Friday afternoon, multiple sources told CRN that Beta was closing in on inking a pre-pack deal to buy Entatech, which has been widely marketing itself in recent weeks - reportedly for £1 - as it looks for a larger trade backer to assuage its deepening credit woes.
Struggling Entatech was given a reprieve last March when new management there agreed a deal with HMRC over its legacy VAT issues, something many onlookers thought improbable. But the loss of its key Fujitsu contract last summer, coupled with tightening credit supply, forced the distributor to look for a buyer. The search intensified at the end of April when its banking backers, RBS, moved to take a closer stranglehold on the company.
By Friday evening, rumours were surfacing that Soper and his team had walked away from signing a contract at the eleventh hour - although at the time sources weren't sure if this was merely brinkmanship.
Soper said that Beta would still deviate from its organic five-year growth plan "if the right opportunity came along".
"We will look to buy a company that can contribute to our business, that may have expertise that we currently don't have," he said. "Entatech fitted the bill, with experienced people, important supplier relationships and a well-established customer base but in the end, it wasn't to be."
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