Once the subject of speculation about being acquired itself, Tech Pacific may well embark on a strategy of acquisition to stimulate growth.
Speaking to ARN at the Melbourne leg of its Expotech national showcase, managing director of Tech Pacific Australia, Kerry Baillie, said acquiring niche distribution expertise was “not out of the question” in the future.
In a frank and exclusive interview, Baillie said that further consolidation in the distribution tier of the channel was inevitable.
There was simply “not enough room in the middle” for all the players that currently make up the landscape, according to Baillie.
“In the end, the market will decide how many distributors there should be in the Australian channel,” he said. “There is no magic number, just market forces.”
When asked if Tech Pacific was going to be a driving force for consolidation by acquiring companies, Baillie said there could be an acquisition of a niche distributor within a year.
“In the market you need one good broad-based distributor, maybe two and then you need several good niche distributors that are complementary,” he said. “I think for Tech Pacific to acquire a good niche distributor would not be a bad strategy.
“We would leave them as a standalone in terms of their skill sets but could support them from the financial aspect.”
In assessing the current distribution landscape, Baillie said you either had to be big or niche.
“I don’t think there is much room in the middle,” he said. “You have to have the volume, the momentum and the breadth of product or you have to be a niche player that is excellent at what it does in a clearly defined market sector.”
So where does he think that leaves players such as Express Data, Digiland, Synnex, Ingram Micro and Dicker Data? “It leaves them very aggressive,” he said. “There are lots [of these players] and I think that is a problem for them.”
Meanwhile, rumours — including speculations over the fate of Daisytek — are getting stronger indicating that several mergers and acquisitions may be on the way, both in distributor and resellers spaces.
Baillie was, however, adamant that the possibility of Tech Pacific looking into the purchase of the troubled consumables and office products wholesaler was not on the cards.