Action forks out for Fraser buy

Observers were taken by surprise with the Action/Fraser purchase.

Action Computer Supplies has finally revealed its latest acquisition target, surprising industry observers with the purchase of Buckingham-based corporate reseller Fraser Associates.

As exclusively predicted by PC Dealer (22 October), Action bought Fraser for a total of #3.46 million, of which #1.73 million is to be paid in cash upon completion. The balance is to be paid over a period of 18 months in cash and shares. When the purchase was first mooted, both companies denied the suggestion.

But the Fraser acquisition is at odds with Action CEO David Mills' stated intention to buy a non-value-added firm that 'fits the company's business model'.

Action COO Duncan Wilkes downplayed differences in the companies' cultures.

He said: 'Fraser generates significant revenue from product shifting.

We will not use the acquisition to set up a services arm.'

Wilkes said the key benefits brought to Action by the acquisition included scale as well as access to the Apple and Mitsubishi product lines.

Fraser Associates had sales of #32 million for the year ending 31 July.

Wilkes said the acquisition would boost Action's turnover up to #205 million.

Industry observers expressed doubts about the companies' compatibility.

One commented: 'Fraser is half distributor, half Var. It will be interesting to see how its sales staff respond to a boxshifting sales model.'

Harry Thuillier, Fraser founder, will remain with the company for specific projects.

But Wilkes claimed Fraser would operate as a subsidiary: 'Although Fraser will have access to Action's full product range and logistics, there will be no impact on the brand.'