Restore offers to buy Arrow's failing UK ITAD business
Restore CEO has 'approached' the company to buy unit but distributor has been tight-lipped on its plans
AIM-listed Restore has approached Arrow to buy its shuttering asset disposal (ITAD) unit, its CEO Charles Bligh told CRN.
Arrow announced its intention to wind down its PC and mobility asset disposition business in the US, UK, Sweden and Belgium last month, with some reports claiming it will scrap the enterprise part of the unit too.
It stopped accepting devices to its facilities earlier this week and the winding-down process is expected to finish by the end of 2019.
Bligh (pictured) stated that Restore contacted Arrow on the day of the announcement, expressing its interest in buying the UK division, was told "thanks for the interest" and has heard nothing from the distributor on the matter since.
"I don't know whether they want to sell it or shut it down," he said.
"We approached them and they just said ‘thanks for the interest, we are working through it' and that they would make sure to keep us in the know.
"I sensed that the announcement was a little bit more of a surprise to the UK business.
"We are interested in most of the unit at this point in time. We believe their business is about £20m in revenue and we're interested in helping them help their customers find a solution.
"I would encourage Arrow not to take too long, given the fact that their staff are going elsewhere. I'm interested in buying it as a going concern and would be interested in taking people on."
Mike Norris, CEO of Computacenter, told CRN at the time of the announcement there was a possibility that the services giant would buy the ITAD business, but he doubted it would eventuate.
Bligh thinks it is "unusual" that Arrow has not updated Restore on whether it is selling the business.
"We contacted them straight away through all avenues because we have no relationships with senior executives," he explained.
"Most of our acquisitions - and we have done over 30 in the last seven to eight years - have been through management coming to us directly.
"If Arrow wants to have a process and take it to multiple bidders I understand that, but that takes time and the value of the business is dropping as customers look elsewhere.
"I am speculating, but if the business is loss-making then typically you would like to cauterise it and close it down.
"Every day more and more Arrow customers are contacting us or someone else, so I would think they would want to be more clear on what they want to do."
Arrow declined to comment on this story.
ITAD-al wave of growth
Bligh is a channel veteran, having worked with IBM for a decade, before becoming COO at TalkTalk.
He joined Restore in March this year, with plans to double the ITAD firm's market share within the next few years.
Restore Technology is one division of publicly listed Restore plc. The group's H1 revenue for 30 June 2019 grew 15 per cent to £106.2m. Restore Technology's revenue grew 17 per cent year on year to £6.1m.
Restore Technology also offers IT moves, secure storage and IT refreshes.
The firm acquired two small ITAD firms in June and July, but Bligh said he is equally comfortable buying companies with larger revenue scales, such as Arrow's ITAD unit.
"[ITAD] is a £600m to £800m market in the UK," he stated.
"We have a low single-digit market share at the moment and we think there's room for a very large independent ITAD business.
"I think there's a huge opportunity in this space to be an independent ITAD business, not beholden to one or two big resellers in the channel.
"The key for us is being channel-focused and no conflict - we don't pay people to sell cloud and software at high margins.
"It doesn't make sense for partners or vendors to build a business in this area; they have overheads and high margins.
"I think this is an area that needs a selection of independents to suit the industry and I think this is a shift we will see over the next few years."