InTech spots training target
Distributor snaps up NetStore division to benefit from 'increased demand' for service
Bullish distributor InTech-nology has snapped up hosting firm NetStore's NetConnect Training business for £1m.
Earlier this month the storage and security distributor revealed its plan to broaden its horizons into networking.
InTechnology, which bought security distributor Allasso last year, will pay £900,000 in cash, and £100,000 over the next year, as part of an earn-out clause.
"NetConnect was bought by NetStore in March 2003. A large part of NetConnect is an integration business, something that was core to what NetStore does," said Steven Bacon, a director at NetConnect.
"NetConnect Training made up about a third of NetConnect's overall business. When Neil Lloyd became chief executive earlier this year, his first decision was to make sure everyone and everything was focused on the core business."
The Training division was not part of its core business, and has been sold off as a result. A number of firms are believed to have made bids for NetConnect Training.
"We were looking for two things in a buyer," said Bacon. "First, the business would have to prosper under the new owner. Second, it had to offer a good price."
Analyst Ovum Holway has said the deal makes sense, despite a period of slow growth for training.
"On the one hand, NetConnect Training should fit nicely beside InTechnology's network security products business," said Anthony Miller, an analyst at Ovum Holway. "On the other hand, NetStore has been making a series of disposals of non-core activities to focus on its main hosted services business."
NetConnect Training posted £1.5m turnover in its past financial year and is one of the largest Nokia/CheckPoint authorised training partners in the world. Nine staff will move over to InTechnology as part of the deal.
"NetConnect Training will complement our training resources across the whole firm," said Mark Jarvis, divisional director of marketing at InTechnology.
"Like any other distributor, we want to maximise our revenues from training.
"We believe we can get more out of the training services on offer. There is increasing demand for these services from the channel."