OpenPSL purchase has appeal for Bell
Acquisition by rival distributor seen as more likely than IPO
OpenPSL's planned Initial Public Offering (IPO) has yet to materialise as speculation mounts that acquisition-hungry Bell Microproducts is lying in wait.
In May OpenPSL's sales and marketing director Jonathan Ellis said an IPO was being considered and that SME investment service provider Altium was testing the investment market on the distributor's behalf.
This followed speculation that rivals Bell, InTechnology and Magirus were eyeing OpenPSL as a potential purchase.
OpenPSL has made no secret of its desire to either float or find a buyer.
Chief executive Mike Kontowtt claimed in 1998 that if the right person came along, or if the time was right for floating, then these options would be "considered".
The proposed IPO, which was announced early last month, initially quelled acquisition talk. However, despite the appointment of Altium there has been no movement, and a trade sale is increasingly likely, according to numerous channel sources.
When contacted by CRN Ellis said he had "no further comment."
Since rumours began to circulate about potential buyers, InTechnology has said it is not interested in acquiring OpenPSL, Magirus was unavailable for comment and Bell Microproducts has declined to comment.
One industry source said a trade sale would probably be a better option for OpenPSL because of the nature of the distribution business.
"The pressure is probably more on OpenPSL to be acquired than on Bell to acquire it," he said.
"The attractiveness of a distributor going for an IPO is limited because it does not have intrinsic value. Most distribution agreements are guaranteed only for a year."
Mukesh Gupta, managing director of distributor e92plus, said IPOs can take a long time because firms like to wait for the right price and investors wait for the right market conditions.
"Investors look for companies that offer profits in the future. Distributors are often dependent on distribution agreements that can be terminated at any time," Gupta said.
"Talk in the channel is that Bell will purchase OpenPSL if the IPO does not go through."