After 30 years, IP and telephony distributor, IPL Communications, has sold parts of its business to Aria Technologies and CommsPlus Distribution, and closed its Sydney office.
IPL sold its voice business, which consisted of Siemens and Panasonic, to CommsPlus Distribution. It sold its video conferencing LifeSize business to Aria Technologies, which also took on a few of IPL’s qualified staff.
“We spent the last six weeks transferring our contracts to those companies and it was hard because we were running two sets of due diligence and agreements,” IPL founder, Stead Denton, said. “We did it and both CommsPlus and Aria went about their business and the transitions very professionally.”
Denton said it was time to exit the hardware market and begin plans for retirement. He began thinking about selling the business in December and held a function on IPL's closing day - March 28.
“It’s a been a great journey in the past 30 years,” he said. “IPL has been successful every year, we’ve had great relationships with major multinationals around the world. It’s been great. I’ve been on my boat since Friday and retirement is going well.”
Due to various contracts with federal government, Telstra and Optus, it couldn’t secure a single buyer for the whole business, he said.
“We had a large public company about 18 months ago offer to take the lot, but because we’re on certain federal government contracts and we're a Telstra and Optus preferred supplier, to transfer those to a non-compliant or non-qualified company, is a nightmare,” he said.
Denton wouldn’t disclose the financial details of the deals and stated his goal wasn’t to sell the business for a lot of money, but to retire and marked March 31 as his final day.
“My goal is to be out of a capital intensive business and look for something that just involved software, a couple of offices and I could run it from my boat,” he said.
“You couldn’t be around for as long as I have without pissing off some people, but that’s business. On a whole, I don’t think anyone that has dealt with us can say they’ve been unduly disadvantaged.”
When the business closed it had about 20 staff who were given the opportunity to work for Aria or CommsPlus.
“We had about 80 people and it would have been irresponsible of me to hire people and not be honest about my intentions. Every time somebody left, we didn’t replace them,” he said.
“By the time I announced it to my staff at the end of last year, we had about 40 staff, and people got jobs and by our closing time we had about 20 staff left. A lot of them had job offers to the new companies, but because of where they were located or whatever the case, they chose to look around.”
The one thing Denton enjoyed the most during the IPL years was watching junior staff grow and develop, he said.
“If there’s one thing I could say about IPL is that we were a great incubator,” he said. “Our model was to get young people in and train them. It was rewarding to work with them.”
Denton said he didn’t want to invest in the business any further because he wanted to get out. The hardest thing to do was tell his staff.
“It felt like you were letting them down,” he said. “You can’t stay in business without investing because in three to four years from now, the market is going to be different and you need to be where the market is.”
He recalled he wrote the first invoice in March 1983. IPL was the first Australian wholesaler importer/distributor of PC peripherals, and print vendor OKI became a big part of its business, before OKI purchased the print distribution side in 2009.
Millionaire at 27, broke by 30
Denton, who left school at 14, began operating his first business when he was 21. It focused on TV and two-way radio antennas, which were the communication devices around at the time before mobile phones entered the mainstream. He sold that business and was a millionaire by the age of 27, but then got into concrete batching plants, which sent him broke.
“I was broke at 30, and then I heard about PCs and had the idea of distribution, but I didn’t have the money,” he said.
So he tapped into mainframe company, ICL, which helped fund his distribution venture. He started Lasercharge, which was sold to Daisytek and he also purchased Voca Communications.
“We plugged into ICL’s buying power and bought a whole bunch of things. OKI was the biggest dot matrix printer at the time, and ICL used to OEM it with the ICL badge. I brought it in as ICL, took the badge off and put the OKI badge on. We sold things like disk drives, floppy drives, monitors and terminals, and we were pretty successful,” he said. “In the early 80s the industry was a lot different than what it is now. If you weren’t in a restaurant at 12pm, you weren’t doing any business.”
Aside from multinational companies, Denton can’t recall a competitor or customer that’s still around since the time he began in the distribution game.
“The fact we’re an Australian company that has lasted 30 years and made money, is an achievement,” he said. “Survival was the biggest achievement.”
It may not be the last time you’ll hear of Denton in the IT industry. He plans to get involved in the software market, but his plans won’t come to fruition for about another 12 months or so. Well at least not before he navigates Australia in his much-loved boat or embarks on driving tour of the US.
“I’ve got some things I want to do that are pretty much underway, but I’m in no rush,” he said. “I’ve spent the last few months getting my boat ready, upgrading navigational equipment and I want to do a bit more travelling.”