NEWS FLASH: Tech Pacific embarks on IPO voyage

NEWS FLASH: Tech Pacific embarks on IPO voyage

Hagemeyer has revealed late today it plans to either float or sell off Australia's largest distributor.

The Dutch company has engaged Salomon Smith Barney to explore the Initial Public Offering (IPO) or sale of Australia's largest distributor.

The move ends weeks of speculation about the Tech Pacific Group's future after some sources in contact with ARN suggested it was in due diligence to be acquired by another distributor, such as US-based Ingram Micro.

Both Tech Pacific and Ingram Micro today reported such discussions did not take place.

In an exclusive interview with ARN late Friday, Tech Pacific Group CEO David Arnott, said Hagemeyer has engaged Salomon Smith Barney to advise the company on its "strategic options".

Arnott said the primary driver was to explore an IPO listing on a stock exchange, most likely in the Asia Pacific region, and possibly the ASX. A date for the IPO has not been set and Arnott is not aware of how much money the IPO would raise. However, a decision is expected in Q2 2001.

He said Hagemeyer is not attempting to sell the Tech Pacific Group, but concedes anything is possible. "As they are exploring an IPO it gets out into the public domain," he explained.

Arnott said Hagemeyer believes Tech Pacific is strong enough to stand on its own feet with $2.4 billion in revenues expected for the 2000 financial year.

The move also reflects Hagemeyer's restructure annouced last year in which it made a commitment to focus on its core business, distribution of electrical components and supplies.

Hagemeyer's restructure has also included the sale of non-core companies such as those in the components and systems integrator arena.

Arnott rejected suggestions Tech Pacific will find business tough in the coming years as margins continue to fall.

"The fact is, margins have always been tight. Our core competency is the ability to make money in a low margin environment as demonstrated in our ongoing profitable performance," he said.

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