VIP Group grabs system builder Ergo Computing

Components distributor buys education-focused laptop and tablet maker in deal that mirrors last week's Westcoast-Viglen union

Distributor VIP Group has snapped up public sector supplier Ergo Computing for an undisclosed sum in a move that will invite comparisons with Westcoast Holding's recent acquisition of Viglen.

Ergo, which builds its own notebooks and tablets, as well as providing infrastructure services, boasts 2,500 clients primarily in the education and public sector space.

Obvious parallels will be drawn between the move and last week's acquisition of public sector supplier and system builder Viglen by distribution giant Westcoast Holdings.

VIP is no stranger to the system building game following its 2011 acquisition of retail-focused PC maker CMS Computers, which makes the Zoostorm brand.

Based in Nottingham, Ergo employs 55 staff and boasts annual sales of £10m. It features on a raft of public sector frameworks, including the outgoing pan-government Commoditised IT Hardware and Software (CITHS) framework.

VIP Group chairman Jatti Sahni said the acquisition would produce a "stronger and more competitive Ergo".

"We have been looking to diversify into this market sector for some time and we see many synergies and spin-off benefits by working in partnership with Ergo," Sahni added.

Ergo will continue to trade as an independent company within the VIP Group, the distributor confirmed.

Ergo managing director Neil Bellamy, who will continue in his position, said: "This is an exciting time for Ergo Computing and being part of a larger group will ensure we can build on our success in IT products and services within the public sector."

In its last fiscal year ending 30 June 2013, VIP Group saw operating profit hike 16 per cent to £2.3m on revenues that rose 14 per cent to £205m. Although VIP's headquarters, manufacturing and distribution centre are based in Warrington, it also boasts additional offices in the UK, the Netherlands, USA and Spain.

Sahni said: "This acquisition represents a further significant investment by VIP Group and demonstrates our on-going commitment to future growth."

Paul Cubbage, managing director of rival distributor Target Components, said: "Contrary to popular opinion, there's plenty of life in PC-building. Having launched our own system-builds a couple of years ago, we've seen first-hand how well received the service is amongst [independent retailers].

"There's still a huge demand out there for good quality, reliable PCs backed by great pricing and service, and handled properly both Westcoast and VIP should do very well from their acquisitions."