Arc directors finalise management buy-out
Former sales director takes charge at Nottingham-based distributor following MBO
Four directors from Arc Technology Distribution have completed a management buy-out (MBO) for an undisclosed sum.
The Nottingham-based distributor, which operates three divisions: security, server-based computing and networking, will now be headed up by Stuart Reay, previously sales director. Finance director Robin Draper was also part of the MBO team, along with two other senior managers who have not been named.
Former managing director Owen Dukes will leave to concentrate on his other business, Propalms, a server-based computing software vendor.
Reay told CRN that Arc is now positioned for growth.
“We have already formed some very strong vendor relationships in all three of our divisions, so we are looking to build on that,” he said.
Reay added that Arc is also on the acquisition path.“There has been a lot of consolidation and we think there is an opportunity at the SME end of distribution in terms of acquisition,” he said. “This is something that we are going to be looking very closely at.”
James Calvert, chief executive of acquisition market watcher Regent Associates, said MBO’s were a popular strategy.
“After an MBO firms can be quite far sighted and flexible in terms of strategy, as opposed to public companies that have to report quarterly or six monthly,” he said. “It also gives them a clearer focus on a buy and build strategy.”
Gary Kennedy, independent executive director at VAR Calyx, which is in the early stages of an MBO process (CRN, 19 March), said: “From the management side an MBO is a good strategy because they have good knowledge of the business and they are better equipped to deliver in terms of future potential. But from the shareholders’ point of view they have to make sure the full value is extracted from an MBO execution.”