Chess makes partial MBO move
VAR group sells back part of last acquisition because it did not fit with business model
Chess has sold back part of an previous acquisition to the original management claiming it was "distracting" to its core business model.
Hoodpoint Communications was the VAR's eighth acquisition in just 10 months. It was subsequently renamed Chess Network Solutions (CNS).
Former Hoodpoint director Pete Moore has now completed a management buy out (MBO) of the hardware maintenance division of CNS. Moore has named the new firm More IP Solutions.
David Pollock, chief executive of Chess, said at the time of the Hoodpoint acquisition: "Hoodpoint has got a lot of expertise in the data arena; it's a perfect marriage."
However, Richard Btesh, director of corporate finance at Chess, told CRN: " We have sold back the part of the [CNS] business that we did not require. We found certain elements of that business distracting.
"We wanted to see how the acquisition went. We have no regrets because we got a lot out of it."
Pete Moore, managing director of More IP Solutions, said: "The deal suited both Chess and More IP Solutions. Chess is focusing on the data and networks side. My background is hardware maintenance and IP converged solutions. the management buy-out will enable More IP Solutions to specialise in this arena. We will continue to partner with Chess."
Jess Thompson-Hughes, managing director of distributor React Technologies, said: "It is an unusual move and it is not standard to sell the maintenance side as that is a real cash cow. This area is obviously not core to Chess."