ASX-listed Cellnet has closed the first of several possible acquisitions with the purchase of flash memory specialist, VME Systems.
Melbourne-based VME is master distributor of SanDisk products in Australia. These include memory cards, flash drives and MP3 players.
"VME sells into a large network of mobile phone and camera shops," Cellnet managing director, Adam Davenport, said. "SanDisk is a leading memory brand and this is a very profitable business.
"SanDisk is also the number two MP3 player in the world and we are already a leading supplier of iPods. This puts us in a very strong position in the portable music market."
Davenport estimated VME had a turnover of about $50 million but was not prepared to provide financial details of the buyout at the time of going to press. He first indicated Cellnet's intention to purchase other distribution businesses back in August. At the time, he said potential targets would need to add significant volumes to existing vendor contracts, offer complementary brand relationships or improve its geographical presence.
While VME was the first cab off the rank, he indicated more deals would follow shortly.
"They will start going like dominoes now. Another acquisition is close to dropping and there are three more we are working on," he said. "We closed our warehousing facilities in Melbourne and Sydney because of deals like this."
SanDisk is also distributed by Brightpoint. VME managing director, Michael Hornsby, refused to comment on this story but it is understood he will be retained as an executive of Cellnet.