Logcom enters administration
Reseller's 'poorly executed' aggressive acquisition strategy ends in cash crisis
Struggling reseller Logcom Group has entered administration. As predicted by CRN, the VAR has appointed accountancy firm PricewaterhouseCoopers (PwC) as administrators.
According to a statement by PwC, the group, which employed 60 people, "ran into financial difficulties due to a lack of investment funds, which resulted in a cashflow crisis".
Edward Klempka and Toby Underwood of PwC will act as joint administrators to Logcom Group and its subsidiaries Logcom Solutions Ltd, MICG Ltd and People in Pictures Ltd.
Klempa added that the company was endeavouring to sell the group as a going concern. "We hope to save as many jobs as possible," he said.
Logcom pursued an aggressive acquisition strategy in 2003, but last month one of its acquisitions, Status Group, went into receivership.
Nitin Joshi, partner at insolvency specialist PKF, said: "[Logcom's strategy] was poorly executed and left behind a trail of unsatisfied dealer acquisitions."
He added that because many sales staff had migrated to other resellers it was "questionable what remains to be salvaged".
"Sadly, next time such a grand plan is presented to the channel, the leading players are going to view it with scepticism," he said.