eXeed to take stake in Dicker Data?

eXeed to take stake in Dicker Data?


It has been one of the longest sagas in the Australian IT channel but finally it seems that distributor, Dicker Data, has found a merger partner in eXeed, a sales and marketing company that is less than two years old.

After rejecting a range of serious suitors and coping with a raft of not-so-serious tyre kickers, owners Fiona Dicker and David Dicker appear to have found common ground with the Melbourne-based sales and marketing organisation.

Run by former Prion MD, Michael Bosnar, eXeed is believed to have been cashed up with investment funds from a leading financial institution and a New Zealand businessman.

Neither Bosnar nor Dicker would confirm or deny the deal is going ahead, but ARN has learnt that negotiations are almost certain to be completed by the end of the month with only legal documentation holding things up.

"It is fair to say that we're in discussions, but I can't say whether or not the deal is going to be finalised," Bosnar said.

"When you start a process like this, you have best intentions, but when large amounts of money are involved, there are always a number of aspects inolved and lots of parties to deal with, which slows [the negotiation process] down," he said.

Although similarly reluctant to confirm whether the proposed transaction would go ahead, Fiona Dicker nevertheless confirmed that the two companies were at an advanced stage of negotiations..

"Well, we wouldn't be negotiating if we didn't want for it to happen, " Dicker quipped.

Contrary to industry speculation, Dicker said that if the deal were to go ahead, it would be a merger, rather than an acquisition.

"It would not be an acquisition in the strictest sense, rather a merger, because [the current owners of Dicker Data] are still going to have financial equity in the business, " she said.

It is understood that there would be no single controlling shareholder in the new entity that could retain the Dicker Data name. The executive body would be divided between Bosnar and Fiona Dicker as executive, and David Dicker as a non-executive director. The identity, quantity and role of other shareholders is not known at this stage.

An ARN source said that while the deal could still fall over, it was "highly unlikely" and that the new Dicker Data entity that emerged would be a much stronger and more efficient operation.

"Nothing is certain until the paperwork is signed but this is going to go ahead," the source said. "eXeed is bringing management skills and funding to the table while Dicker Data is bringing great revenues, marketing skills and customer relationships.

"It is not that Dicker Data necessarily needed an injection of funds to stay alive. It is more to do with the fact that [the owners] wanted to pull some money out of the business that they have built over an extended period of time."

It was unclear exactly how much the deal would be worth, but the source indicated that it was based on multiplying by three times the company's earnings before income tax. The fact that Fiona Dicker and David Dicker wanted to stay in and that third party capital could be raised to fund the deal suggests existing balance sheets demonstrate Dicker Data's ongoing viability.

ARN's source said that "eXeed Global is buying Dicker Data" and then "merging" operations. It is expected that all staff will be retained, indeed more will be employed to significantly ramp up Melbourne and Brisbane operations, according to the source. Industry analysts believe a combination of Dicker's impecable sales reputation and eXeeds back-end excellence could give the established players a serious run for their money.

For more on this story, see this week's issue of ARN.

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