Computacenter set to double US sales with acquisition of $1.2bn-revenue firm

Channel giant acquires Canadian firm Pivot

Tom Wright
@TomWrightCRN
09 September 2020

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Computacenter has doubled the size of its US business with the acquisition of Pivot Technology Solutions.

Canada-based Pivot pulls 85 per cent of its revenue from the US - a market that Mike Norris recently told CRN he was keen to grow in.

CEO Mike Norris said: "We are pleased with our progress in the US, including the acquisition of Fusionstorm in 2018.

"The acquisition of Pivot represents an opportunity to increase our scale, geographic footprint and capabilities in US.

"Additionally, Canada expands our total market opportunity and helps us meet the needs of international customers.

"The businesses are a good fit and the combination gives us the opportunity to enable the long-term success of customers, partners and people from both teams."

Computacenter will pay CAD $105.8m (£61.75m) for Pivot in a deal which has been recommended by the Canadian firm's board, but still requires shareholder approval.

The US arm of Computacenter will be integrated into Pivot, the firm added, doubling US revenue and headcount. Pivot's US sales were $1.2bn in 2019.

Read: 11 times Computacenter's straight-talking CEO told it like it is

Computacenter announced its H1 revenue today, with US sales flat for the six-month period ending 30 June 2020, at $477.4m.

The wider group reported a 1.5 per cent increase in sales to just under £2.5bn.

Profit before tax leaped 42.5 per cent to £72.4m as a result of "COVID-19 related cost reductions and improving services and technology sourcing margins".

Computacenter said that Pivot's customers are large enterprises across the US, while subsidiary TeraMach Technologies specialises in the Canadian public sector.

Pivot also has a material impact on Computacenter's US services business - adding $80m in sales.

Computacenter reported US services revenue of just under £7.7m for its H1.

The firm added that it expects Pivot's leadership team to remain with the business - including CEO Kevin Shank.

UK Growth

The UK was the stand-out region in Computacenter's H1, with sales climbing 7.2 per cent to £858.8m.

Revenue in the technology sourcing category shot up 11 per cent to £643.2m, driven by demand for remote working technology, but services dipped 2.5 per cent £215.6m.

The services decline came in the managed services area, with some contracts ending and Computacenter also reducing charges to customers to nurture long-term relationships, it said.

Revenue in Germany dipped 2.8 per cent €966.4m (£878.8m), with new business wins suffering throughout the lockdown period.

Technology sourcing revenue dipped as a result of decreased demand from large framework agreements, Computacenter said.

Revenue in France was flat at €346.5m.

Norris added: "As previously stated, our business has performed well this year to date and proven to be flexible in these extraordinary times.

"It is impossible to predict exactly how the world will recover in 2021, and beyond, and the implications for our customer base.

"We do believe that our customers will continue to invest in technology and that we have built a substantial reseller business with the largest service capability of any reseller in the world and the most substantial international footprint which should enable us to deliver a reliable and consistent business for our customers, employees and shareholders."