Tech Data makes £140m bid for Azlan

Two big network distributors are to merge as the market continues to tighten

Network distributor Tech Data is to buy the long-established European network distributor Azlan. The bid, for £140m, is expected to be approved by Azlan shareholders, and could be complete by the end of March.

Azlan, based in Wokingham, has offices in 15 European countries and was founded in 1984. Tech Data, on the other hand, has its headquarters in Florida and distributes round the world -- though its European presence is comparatively small.

"With the uncertainty of the timing of any upturn and the trend towards more globalised competition we believe Azlan and its employees will benefit from being part of a much larger global IT business," said Barrie Morgans, chairman of Azlan.

"Our respective business models are highly complementary yet distinct in terms of product focus areas, customer bases, distribution capabilities and overall service offerings," said Steven Raymund, chief executive of Tech Data.

The move looks like part of the inevitable consolidation and globalisation of the industry. Large suppliers who sell through the two distributors welcome the deal: "It is good for us," said Mads Lillelund, executive vice president of enterprise network equipment vendor Enterasys, "Both companies distribute Enterasys equipment." Enterasys was in the process of simplifying its distribution network -- moving from nine distributors to three in the US -- and the purchase will avoid the necessity of a similar move in Europe.

The offer, of 125 pence per share, is nearly 40 percent higher than the shares' value on 6 February.


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