Dixons offloads Equanet to Kelway
Reseller hopes the takeover of Bury-based VAR will help it reach £500m revenue mark
Kelway has snapped up Dixons-owned reseller Equanet's non-trade and public sector businesses in a move it hopes will propel it towards its goal of becoming a half a billion-pound business.
The Bury-based reseller, which was acquired for an undisclosed sum following a six-month negotiation period, will expand London-based Kelway's reach in the north of England, which the latter claims will provide it with "significant opportunities for revenue growth".
Dixons bought Equanet in 2005 when it was regarded as one of the UK's top mid-market and public sector players. Since then its turnover has fallen to less than £50m, according to sources, following several downsizing moves and office closures.
Rumours that Dixons was looking to offload Equanet have persisted for years and Dixons Retail chief executive Sebastian James said this morning's agreement is part of its strategy to focus on "leadership positions in key markets and territories".
Kelway will pick up thousands of customers and hundreds of staff from Equanet through the deal, which forms part of Dixons trading division DSGI.
Dixons Retail will continue to operate its PC World Business offering, serving small businesses in its stores across the UK. A Dixons representative said turnover for the jettisoned business was in "the tens of millions".
Kelway, whose revenue topped the £350m mark for its financial year to 31 March 2012, hopes the acquisition will help it reach its goal of £500m revenue.
Equanet will continue as a Kelway-owned brand until the end of the month when the deal is expected to close, after which the pair will trade on integrated systems.
Kelway's managing director Dan Laws told CRN that while no decision had been finalised, it would be likely that the Equanet brand would be retired in future, although divulged no time scale.
Laws added that the integration period would be aggressive, and the firm's focus for the coming months would be on merging Equanet into the firm, although he did not rule out future takeovers in the future as well. Last year, Kelway acquired Ireland's biggest LAR Business and Scientific Services.
The acquisition will also bring Kelway's ServiceWorks suite of cloud services to the Equanet client base, as well as a new software offering created by combining both companies' Microsoft LAR accreditations.
Kelway's chief executive Phil Doye claimed the acquisition will reinforce its growth trajectory and customer proposition and Dixons Retail chief executive Sebastian James said the pair complement each other extremely well.
The reseller claims to operate with no long-term debt and a strong balance sheet.