With its initial acquisition of CHA now complete, international distribution giant CHS is now scanning the landscape for new targets.
Alexis Lope-Bello, a CHS director for mergers and acquisitions, said that despite a commitment to tighten its belt after recent disastrous financial results, the distributor is still aiming to grow its Australian operation.
"We are certainly aiming for other acquisitions to complement what we're doing here with CHA," Lope-Bello said.
"Now that we're in this market, it's our intention to capture other companies and finish the job."
What CHS will not do is rush into any acquisitions, he said. As a result, he was not willing to suggest any timeframes for the company's future acquisition plans.
Lope-Bello did confirm that Melbourne-based distributor Prion was still very much in CHS' sights, but it was now up to Prion to decide if it wanted to proceed with CHS, he added.
While CHS committed to cutting costs after it reported financial earnings for 1998 that were only half what had been anticipated, costs were being slashed in areas that would allow it to keep expanding, Lope-Bello claimed.
For example, it was aiming to make use of Internet technologies to save money and was also consolidating the back-end systems and warehouses of some operations.
"We are certainly moving towards being an Internet wholesaler," he said.
Like Ingram Micro, Lope-Bello said that CHS would be looking to introduce new initiatives that have proved successful in other parts of the world into the Australian market, through CHA and any other party it acquired. For example, it has introduced in Europe Internet systems that allow resellers to use CHS' back-end to front-end their own Web site.
Lope-Bello said that CHS acquired CHA because they had like-minded business strategies.
"Like us they are focused on a limited number of vendors and have grown recently through acquisition," he said. "If you focus on a few vendors and products then you can put together great teams of people who really have expertise in those products and can provide additional services and support for your dealer channel."
In contrast to Ingram Micro, CHS believes in allowing the companies it acquires to operate as individual entities and retain their identity. According to CHA director Stephen Sampson, that was one of the reasons the local distributor decided to team with CHS.
"We talked to Ingram Micro too, but it really wasn't attractive to us because we wanted to retain our identity. CHS is happy to let us keep growing and let us run our own business.
"No one knows if the American model can work in Australia yet. Merisel has already failed," Sampson said. "This way, you can integrate your back-end systems and take away some of the costs and you have the CHS global buying power, but you don't lose the entrepreneurial flair."
Ingram Micro brands itself
SYDNEY - Ingram Micro is now officially trading in Australia.
The world's largest distributor, which acquired both Electronic Resources and ITG to force its way into the Australian market, has now officially let go of those brands and will now operate under the global Ingram Micro brand.
Michael Shea, Ingram Micro's managing director, said: "Ingram Micro Australia is expanding its operations to provide resellers with the complete solution. We have just started distributing Hewlett-Packard commercial products, Diamond Multimedia's complete range of products and Microsoft Press.
"Over the next six months, Ingram Micro will be making a number of new vendor announcements and will also be focusing on value-added distribution with the launch of a PC configuration centre, online order entry and other customer service initiatives."