Cellnet has signed a heads of agreement to acquire South Australian distributor, HiTech Distribution, for an undisclosed sum.
Cellnet managing director, Adam Davenport, said HiTech bolstered its South Australian and Victorian operations as well strengthened existing vendor relationships. He singled out Acer as a key partner for both companies. HiTech also distributes products from Epson, MYOB, Samsung, Symantec, Belkin, Microsoft, NEC and Lexmark.
"Acer was very important to their business and to ours. There is some overlap, but the business fits nicely with ours," Davenport said. "They have a loyal reseller base, and good relationships with Canon and Epson - brands that are also important to us."
He said Cellnet had approached HiTech about buying the business. Although Cellnet did have a small facility in SA, this had largely been focused on its telco business.
"It meets our criteria in terms of adding volume to our existing brands, as well as increasing our geographic footprint," Davenport said.
He compared the South Australian market size to that of Queensland, its home state.
"It's largely a regional market with an SMB customer base. This is the space we have done well in," he said. "The company has a very large customer base in South Australia, and we are looking forward to introducing our range of products to them."
As part of the deal, HiTech founder and managing director, Ian Vagg, will stay on for 12 months to oversee the integration of the two businesses. HiTech CEO, Richard Davies, will also take on a senior management role within Cellnet. All 12 staff will be retained, Davenport said.
Vagg said the buyout was a win-win for both his staff and customers because it provided stronger warehousing and product resources as well as financial backing.
"I am convinced Cellnet South Australia will continue to follow my fundamental business philosophy of always putting our customer's interests ahead of our own," he said.
Davenport signalled Cellnet's intention to hit the acquisitions trail earlier this year. Its first purchase was Melbourne-based SanDisk distributor, VME Systems, in October. They are being funded through a $50 million credit facility.