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Westcon completes its merger with LAN Systems

Westcon completes its merger with LAN Systems

Comstor subsidiary Westcon moved its entire operations into LAN System's premises on September 1 and the two companies will operate as a single $200 million network distribution entity under LAN Systems banner.

The move finalises the merger which was first announced in April last year and is designed to allow the combined entity "more effective an extensive services" according to LAN Systems general manager, Nick Verykios.

Verykios told ARN last week that the companies have decided to bring the amalgamation forward because of an overwhelming demand from its resellers.

"We've completed an ambitious plan," Verykios said. "Our customers and vendors have supported this move quicker than we had expected."

Verykios said the company is achieving its forecast 40 per cent growth for the year and Westcon's stock price has remained solid where many similar entities have suffered.

"We're bucking the trend. We are working 10 times harder to complete the sales we get involved in, but we are getting those sales," affirmed Verykios.

He claims the merging of the two companies into one entity is also expected to reduce the venture's overall cost structure while providing additional marketing funds to further penetrate the market. The company's resellers will all benefit from improved logistics, configuration and credit as well as better professional and technical services.

Verykios said there would be no lay-offs as a result of Westcon merging into LAN System's premises, with some account managers re-deployed into business development roles that target specific industry verticals. "We are actually hiring more people rather than getting rid of any," he said.

Comstor (formerly known as Datatec) purchased LAN Systems last year for more than $30 million in a move that instantly catapulted LAN Systems onto the global stage. The original plan was to integrate LAN Systems into the Westcon Group and eventually phase out the LAN Systems brand.

However, the combined entity will now operate under the LAN Systems moniker, which has grown to a position of considerable strength in the Australian IT distribution channel.

"We asked our vendors and our customers, and they said they wanted LAN Systems," Verykios said.

Verykios was quick to point out that, despite tough times, sales at LAN Systems were up nearly 40 per cent on last on the back of good results with prominent partners such as Alcatel, Citrix, Trend Micro and Cisco.

"A key driver for the integration was that our customers wanted to deal with one central entity for all their networking and communications needs," Verykios said. "The integration also delivers cost reduction to our business, giving us more effective use of funds to grow into new markets and reach new customers in new verticals."


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