CMS Distribution plots trio of acquisitions

Storage distributor plans to make an acquisition every 18 months as it chases £500m turnover target

CMS Distribution plans to continue making an acquisition every 18 months after setting itself an ambitious 2020 turnover target of £500m.

Having snapped up CCI in 2011 and Interactive Ideas in 2013, the storage distributor has moved to consolidate its warehousing facilities, investing in a new 60,000 sq ft operations centre in Castleford.

Talking to CRN, CMS chief executive Frank Salmon (pictured) said this would hand it a platform to grow revenues from an estimated £172m this year to £500m in 2020.

CMS plans to make two or three acquisitions over the next five years, including one in 2015, Salmon revealed.

"To get there we expect organic growth, but it would be appropriate to focus on an acquisition every 18 months," he said, adding that targets must have a good overlap with its existing B2B and B2C customer base.

"We try to select acquisition targets that are complementary to what we are doing with existing customers, which allows us to be more focused with the integration. They must be of a size that is worthwhile," Salmon explained.

The consolidation of CMS' two old warehouses in west London and Harrogate to Castleford had been "seamless" for customers, Salmon claimed.

The new operations hub features an integration facility that will allow CMS to integrate 20,000 network-attached storage and storage area network solutions this year, Salmon said.

"A lot of solutions are shipped unpopulated and we populate the solutions with the hard drives, test them and ship them to our customers," he said. "We did that before but we were running out of space and the new facility gives us plenty of space to continue that growth."

Despite Castleford being more remote from CMS' southern customers, the fact it is closer to the Midlands bases of DHL and DPD will mean resellers across the country enjoy a faster service, Salmon claimed.

"If we were shipping to someone in Kent, the goods would typically go up to a distribution hub in Birmingham first before being shipped back down south," he explained. "The new warehouse will give us the advantage of being able to ship goods later – it's an enhanced service."