Magirus: Others knocked, but we had to answer Avnet call

Distributor's eponymous leader on why he did not want to be the last European player fighting against consolidation

Christian Magirus has claimed that now is the right time to sell up, as his firm was in danger of being the "last European distributor running against the trend" of consolidation.

Speaking to ChannelWeb, Magirus (pictured), who serves as chief operating officer of the company that bears his name, claimed that a number of potential suitors had "knocked on the door" of the Stuttgart-headquartered firm.

"In the past 18 to 24 months most of the European distributors that are privately held got bought, and the last one [remaining] is SDG – and everyone is speculating about whether Ingram will buy them. We started to wonder: ‘Are we the last one running against this trend?'," he said. "We were not actively looking for an exit. But, with what is happening in the market, with all the consolidation, of course we started to think: 'Is our position sustainable long term?'"

Magirus claimed that consolidation is being largely driven by vendors demanding "a more robust and consolidated distribution landscape". He added that the level of investment needed to branch into areas such as cloud computing also gives the bigger players an advantage.

Avnet was the right home for the German distributor for three key reasons, said Magirus, the first being the success of Avnet's acquisition of Magirus' HP and IBM business in 2007. Second, he singled out the fact that "there is close to no real overlap" in the two firms' portfolios. Finally, he pointed to the 2007 deal again, the aftermath of which left him confident Magirus staff would have a "good career path" with the company's soon-to-be new owner.

Key vendor relationships and additional geographical coverage across the continent are the key assets Magirus brings to Avnet, according to the distributor's operations chief.

"We have franchises that are not overlapping and bring a strong VMware, Cisco and EMC VCE franchise, which is good for them," said Magirus. "We have also given them coverage [in places] where they had presence, but were maybe not that strong. I also strongly believe we have a very qualified team, one of the best in the market."

Looking ahead
European distribution consolidation will continue to be driven by the bigger vendors, predicted Magirus, but he insisted there will always be "a strong need for local players" in niche and emerging technologies. He added that there are still about seven multi-country Europe-based players with opportunities for continued growth, including Actebis, Esprinet and Computerlinks.

Magirus claimed he did not know what the future would hold for him as an individual following the closure of his company's buyout, but he hinted that, whatever happens, he intends to remain in the distribution space.

"I am [approaching] 50, which means I'm still too young for retiring, and I love distribution," he explained. "My number one [priority] is that I have an obligation to [make sure] the integration works, that Avnet is happy with the company it bought and that the [Magirus] teams are looked after. Then we will see what happens with me."