Gateway considers snaring NZ assembler

Gateway considers snaring NZ assembler

PC vendor Gateway is reported to be considering the buyout of Australasian assembler and direct marketer PC Direct. When contacted by ARN last week, PC Direct general manager David McKee-Wright stopped short of confirming any serious interest from Gateway. However, he added that a decision on PC Direct's future could be made this week.

"There are a few people looking at PC Direct. It's always for sale at the right price." Suggesting a deal was imminent, he added: "If you call me back next week, I might be able to help you."

It is believed Gateway has done a due diligence examination on the New Zealand-based organisation at a time when its parent, US Office Products (USOP), appears to not be performing to its expectations.

With an estimated $1.5 billion turnover, PC Direct was acquired by the Blue Star Solutions Group in October 1996. Blue Star in turn is owned by USOP.

Weak links

The direct PC company and another subsidiary, Ubix, are regarded by some in the industry as the weak links in the Blue Star stable.

Graham Penn, IDC Australasia's research general manager, last week confirmed that Gateway executives have visited PC Direct and that they have looked at the company under due diligence.

However, it could be some time before a decision is made, he said. "No other New Zealand PC company has the resources to take over PC Direct, and the alternatives are few and far between.

"Gateway fundamentally builds in Asia and does final assembly in Australia.

"Any deal would turn on price. PC Direct would fit Gateway's business model but you have to ask why they would bother.

"However, all things have value if the price is low enough," Penn said.

Blue Star Solutions' chief executive Anthony Howard didn't respond to ARN calls last week, while a Gateway spokesperson also would not confirm the vendor's interest in PC Direct.

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