Chess continues acquisition spree
Telecoms reseller takes number of acqusitions to four this year
Aggressive telecoms reseller Chess is on course to fulfil its pledge of making an acquisition a month in 2007 after swooping in to land Adodo Communications.
The VAR, which is aiming to double its turnover to £50m by 2009, has already snapped up three rivals this year, but is hungry for more conquests.
Richard Btesh, director of corporate finance at Chess, said: “At any one time we are looking at 20 to 30 deals and some of those deals will drop this year. We now have a proven integration team and expect to make one acquisition a month this year.”
The purchase of Adodo, which boasts 90 customers and an annual turnover of £500,000, fits in with Chess’s recent decision to widen its acquisition strategy to include smaller VARs.
“It is a real struggle for smaller telecoms VARs to maintain their customer base and do all of the billing and backroom logistics and operations,” Btesh said. “We take the headache out of running the business and they bring us more customers and service their existing customers.
“Small and mid-sized resellers are struggling against the rise of VoIP, declining revenues and customer churn. Unless a company has critical mass, it’s difficult to make an impact. Chess has that critical mass.”
Keith Humphreys, managing consultant at market-watcher EuroLAN, said: “I think this is the right direction to be going in. There is a lot of consolidation in the channel and companies like Chess are leading it.
“But Chess should be acquiring as large as it can as the effort of integration is so high. Making such small acquisitions could be a distraction.”
Chess, which is expecting a turnover of £25m for the year to 30 April, has already grabbed VARs Qualitel and SLG Communications as well as the telecoms business of Pentel.