Ilion finally goes Dutch

Ilion has finally entered Holland by acquiring a loss-making distributor, nearly a year after its first attempt to break into the Benelux market.

The distributor acquired Unix specialist Foundation Systems for #4.7 million last week. The sale is expected to be finalised within the next two months.

Ilion had hoped to break into the European market last year by purchasing Dutch distributor Landis. But the talks ended in ruins after breaking down at the due diligence stage.

Wayne Channon, chairman of Ilion, said: 'We wanted to enter Holland since Benelux is the fourth largest market in Europe.'

In the year ended 31 December 1996, Foundation Systems reported a pre-tax loss of #170,000 and a turnover of #2.3 million. Commenting on the #4.7 million purchase price, Channon said: 'The price is reasonable. It is based on the expectations of profits.'

An initial consideration of #500,000 in cash and borrowed facilities has already been paid.

Ilion announced its acquisitive intentions after reporting a 36 per cent increase in turnover (PC Dealer, 27 August). Foundation Systems is the fourth purchase the company has made in the past two years.

Foundation Systems, which also has an office in Belgium, has a 350-strong reseller network. Its suppliers include Oracle, SCO and Chase.

He said: 'We wanted a distributor with Unix knowledge and not particularly networking experience because we can teach it that.'

Channon denied there would be any redundancies as a result of the acquisition and said Ilion will be looking to double the number of employees within the coming year.