IT&e has announced it will exit the distribution arena. The company signed a deal with Cellnet Telecommunications Group to divest Chips, its computer hardware and peripheral distribution business, and transfer arrangements to Cellnet subsidary, IT Wholesale.
IT Wholesale will take over several of Chips' product lines, leaving IT&e to concentrate on providing IT services and software applications to the banking sector, which the company now considers amongst its core compentencies.
Under the agreement with Cellnet, IT&e will hand over inventories and distribution arrangements. All other assets and liabilities will remain with IT&e, according to the companies.
In the last 12 months, Chips has scaled back from an extensive product line of over 30 vendors to less than 20 niche products.
The deal is still subject to whether Chips' vendor partners will assign distribution agreements to IT Wholesale and the completion of due diligence of the inventory.
"Gaining the distribution rights to further leading brands aligns well with our future growth plans," said Cellnet managing director Mel Brookman in a statement to the Australian Stock Exchange.