Elcom seeks partner to move into Europe
Reseller decides whether to sell up or find a strong financial partner to fund growth as it holds talks with investment banks
Top five reseller Elcom International is thrashing out details to seek a financial partner to help it expand into the European market, using its UK operation as the core for growth.
The reseller is involved in talks with investment banks to discuss whether to sell the company outright or merge with another firm.
It is also in the process of evaluating potential strategic partners to whom it will hand over the task of devising the best strategy for the company.
According to Elcom, the move is necessary because it believes that it is currently undervalued on the US stock exchange.
The talks pushed Elcom?s shares up from $5 to $7 per share on Nasdaq, finally closing on 3 July at $7.25.
Jim Rousou, president and CEO of Elcom subsidiary Catalink Direct, said there was ?a very strong likelihood that its partner would be one currently without a UK operation, which wanted to expand into Europe and which wanted to use the UK as a bridgehead?.
He said: ?We have the UK?s interests at heart and it will give us a greater international presence and greater access to resources.?
Rousou also said there had been ?positive feedback from potential partners? but insisted that the search had not yet begun officially and had to be conducted through the bank, which would see that stockholders? interests were a priority issue.
Kevin Thackrah, joint MD at Elcom UK, said the company was ?quite excited by it; it was the right thing to do because of the mass consolidation taking place within the computer reseller industry?.
?US players are expanding into the UK, vendors are trying to string global deals together and we now have a job to do to prepare ourselves for that track,? he said.
Thackrah was unable to name any possible partners but said: ?Statistically speaking, the right size player that will add value to what we are doing is more likely to come from the US.?