Dicker Data announced its intent to purchase Express Data Holdings, including Express Data and Express Online, on February 11, a deal that was first tabled at the 2013 ARN Awards Judges’ Lunch.
The purchase received landslide support from Dicker Data’s shareholders, with a total of 121,481,742 shares voted in favour of the buyout on March 14. Shares against amounted to 83,250, while 35,240 abstained.
The Express Data and Express Online brands have now folded under Dicker Data; the process of integrating the companies commenced today. According to chairman and CEO, David Dicker, two Dicker Data staff members would be at the office of ED and EO to start the process.
The distributor will continue to operate exclusively from its Kurnell location to which further space was added prior to the February 11 announcement.
Dicker Data noted in its posting that due to the timing of the transaction completion date, the board had has postponed the declaration of the quarterly dividend scheduled for March 2014 “until further notice”.
Dicker Data has taken on a $140m debt to fund the Express Data buy. A credit line of $130m had been agreed to with Westpac Bank, which included a $65.5m cash advance in the form of a bridging facility.
This was required as Express Data parent, Dimension Data (DiData), would not assist in facilitating the financial assistance of the Corporations Act.
Dicker Data also secured a loan of $10m from Investec to provide overhead during the integration period which will commence from April 1 at the completion of the takeover.
The Dicker Data share price which had dropped to as low $1.25 on March 26 hit $1.52 at 4pm today April 1, however, the cumulative volume of shares traded over the four days March 26-28 and March 31 was relatively low at 157,795.
This is its highest share price since Dicker’s first day of trading on the ASX – January 27, 2011, when the share price opened at $0.21.
David Dicker and his ex-wife, Fiona, hold the majority of shares in the company.
On March 31, ARN reported that Dicker Data and Apple agreed not to continue a multi-million dollar distribution partnership that Dicker inherited through the Express Online part of the Express Data Holdings transaction.
According to chairman and CEO, David Dicker, Apple required a $20m bank guarantee for the deal to proceed which Dicker could not get.
"You need the guarantee to get a credit account with Apple," Dicker said. "The guys in the US said 'we don't like the look of this, we need a bank guarantee'. We couldn't get it."
However, Dicker said partner deals with HP and Microsoft had been negotiated and were “over the line.”
Apple declined to comment.