Editorial: Who is on the Cellnet hit list?

Editorial: Who is on the Cellnet hit list?

As a publicly listed company, Cellnet is not allowed to speculate without making announcements to the market. But given that it has millions of dollars burning a hole in its pocket, which distributors is it likely to be making eyes at?

The first point to make is that there are plenty up for sale if the price is right. But matching seller expectations, even in such a buyer's market, will not be easy.

Managing director, Adam Davenport, has highlighted three areas of particular interest as he looks to strengthen Cellnet's position in the market - adding volume to existing vendor contracts, bringing on complementary brands and geographical expansion.

In terms of adding volume to its current line-up, the most attractive would have to be Dicker Data. As well as bringing substantial HP and Toshiba business to the table, it would also improve Cellnet's position in NSW.

Dicker has been a profitable business year after year, even in times when many of its competitors have struggled, and has built a knowledgeable team thanks to a low employee churn rate over the years. The recent appointment of Ingram's former IBM sales manager, Chris Price, as head of its sales team also looks to have been a shrewd one.

The big question is whether David Dicker would be willing to sell. He has attempted to finalise acquisitions of his own this year and has also spent a lot of time working on a public float, which suggest he is still looking to achieve growth of his own.

But he has been frustrated by HP refusing to grant access to its printers and spends an increasing amount of time in New Zealand. Maybe he would be prepared to accept a golden handshake that would allow him to plough his energies into something else.

From a geographical perspective, Cellnet could do worse than spend some of its dollars buying one of the leading players in SA, WA or both. There are a handful of attractive options but one that absolutely leaps from the page - HiTech Distribution.

Based in Adelaide, HiTech could add significant value to existing Cellnet vendors with Acer, Belkin, Epson, Kyocera, Lexmark, NetComm and Samsung all in its stable.

It would also give the Queensland-based distributor an excellent list of local resellers that would be likely to stay on board if the sales staff they were accustomed to buying from were retained.

You also have to wonder if HiTech managing director, Ian Vagg, would be tempted by a reasonable offer.

He has been in the game a long time, matching the sales of much larger competitors for leading brands in his home state.

But he must have been frustrated when ARN reported local Acer boss, Charles Chung, was looking to shed a couple of distributors during the next two years. If the Taiwanese PC maker did shed a couple of distributors, HiTech and WA-based Compu Wholesale would be big favourites for the chop.

Compu Wholesale - and other leading players in SA or WA like BMS Technology and J Mills - is also likely to have made an appearance on the Cellnet radar. Watch this space for where it spends the money.

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