InterX poised to offload Ideal
Speculation grew last week that InterX is about to jettison Ideal Hardware, its profitable bricks and mortar business, to become a global Internet software player.
Speculation grew last week that InterX is about to jettison Ideal Hardware, its profitable bricks and mortar business, to become a global Internet software player. The acquisition of ecommerce provider Cromwell Media and two high-profile appointments for its embryonic online ventures were the strongest indication yet that InterX is expanding its online presence.
InterX, the parent company of Ideal Hardware, is paying £226m for Cromwell.
It will develop Cromwell as an Internet applications factory and address vertical market areas with its business-to-business e-commerce technology, Bladerunner.
InterX has enlisted Robert Bruce, who has left rival Broadvision, to be its chief executive. Philip Crawford, most recently president of EDS and former managing director of Oracle UK, is also joining the organisation as non-executive president of its information portal, IT Network.
These appointments follow the earlier arrival of EDS's Robert Wirszycz as chief executive of InterX subsidiary IT Network.
James Wickes, chairman of InterX, told Computer Reseller News: "We need Cromwell to be credible in the market. There will be two legs to the group. One is the product comparison service which we will offer across vertical markets, and the other is the vertical software development business."
Sources said the sale of Ideal will play a critical role in funding the group's expansion plans. "With the disk business out of the group (Ideal Hardware) we need to have a core value, and without access to that, we can't gain access to vertical markets," said Wickes.
InterX plans to raise £30m through a new stock issue to prime Cromwell for further expansion and development. Funding for IT Network will come from other sources. InterX is keen to conclude a deal to end the uncertainty over the future of Ideal and is looking at all potential sources.
Analysts familiar with the group believe funding for IT Network and Cromwell will come through the sale of Ideal.
According to sources close to the company, big European and US companies will be involved in the final stages of negotiations and one large financial organisation is also believed to be involved.
However, a management buy-out or independent spin-off from the InterX group is also possible.
Recent speculation about potential buyers for Ideal has, according to Ian French, chief executive of Ideal, "not only been wide of the mark, but also fails to understand that what we are talking about here is a very complex and highly developed distribution organisation."
InterX's recent share price rise means that the company will not be cheap, and French refused to rule out other possibilities.
"Ideal is in a very good position to be a buyer and lead the consolidation in UK and Europe," he said.
French refused to speculate on the figures, but analysts estimate Ideal will report later this quarter, more than £450m in sales when it posts its results. "We have grown at a level over the past six months that is going to stagger most people. We have left the pack behind - we are easily the third-largest distributor in the UK and we are snapping at the heels of Ingram," he said.