Acquisition broadens Legend's capabilities

Acquisition broadens Legend's capabilities

Memory manufacturer and distributor, Legend Corporation, has acquired local electronics house, Cable Accessories (Cabac), for $25 million. The deal is the latest step in its plans to embrace the convergence trend.

Legend CEO, Bradley Dowe, said the South Australian-based company had been planning the purchase for some time and had been searching for an acquisition specifically in the electrical space.

"We started looking for a company to fit with our product and market focus," he said. "It's not about acquiring a company, but about putting two units together to continue to drive our growth.

"We see a lot of crossover in the future of convergence of products. Ten years ago, electrical products were just that. Now they are becoming electronics, which is an area we are strong in. This deal sees us expand sideways, rather than just go in one vertical direction."

Another key strategy was to provide existing channel partners with broader product sets and higher margin hardware. The new deal would see nearly 4000 product lines added to Legend's books, Dowe said. Cabac goods could also be easily bundled with its existing range of IT and CE products.

"Channel partners are squealing about more margin. We want to deliver more opportunities for them," he said. "Cabac is a great fit. It wouldn't make sense for us to buy a memory distributor. We're looking for complementary growth, not growing marketshare."

Dowe said Legend would retain all 120 Cabac staff, as well as its management team. The Cabac brand would also be retained.

While there was only a small overlap in product focus and market coverage, Dowe said it would look to consolidate back-end systems and co-locate its warehouses. Both Legend and Cabac maintained a physical presence in every state.

"We're looking at this as an acquisition of complementary products, markets and people. We want to deliver more growth and have increased resources," he said.

The deal is expected to be completed by July. The integration process should take about three months, Dowe said.

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