Bell increases European investment

$25m injection is attempt to reduce debt and underpin growth strategy

Bell Microproducts will inject a further $25m (£15m) into its European business in an attempt to reduce debt and underpin its growth strategy for the region.

The distributor has now invested more than $47m into Europe since it bought UK distributor Ideal Hardware in August 2000.

European executives at Bell said further investment is a signal to its competition that, despite speculation of recent financial and credit challenges, the company is "a hungry tiger with a strong balance sheet".

Ian French, president of Bell Europe, said despite the recession and channel changes, the firm has grown by 50 per cent in the past three years.

But he admitted: "With the invasion into Europe, the purchase of TTP, the opening up of our licensing business and the move into the enterprise space we challenged ourselves to a certain degree."

James Illson, chief financial officer at Bell Microproducts, said: "First and foremost we view Europe as a very, very strategic part of our business. We also see a lot of opportunity for growth in Europe."

French said Bell Europe was not the only one feeling the economic pinch. "The market really turned against us all," he said. "This is illustrated by the host of recent collapses, fallouts, mergers, forced mergers, sales and attempted sales."

Steve Raymund, chief executive of rival distributor Tech Data, agreed, but welcomed the increased consolidation.

"I don't know that the actions of any one competitor lie at the root of the industry's challenges in Europe. The economy and pitiful state of IT spend are far more important issues," he said.

"It does seem that consolidation may be accelerating, which would be welcome in our overcrowded market."