Computacenter returns to Germany
Buys GE Compunet
Computacenter is returning to Germany in style, by buying GE Compunet, the country's biggest reseller. As a bonus it gets a leading position in Austria too.
The price is a steal, even in these depressed times for resellers. CC is splashing out £36m upfront for the GE CompuNet and GE Capital IT Solutions Austria businesses on completion. And it will pay up to a further € 64 million (£41 million)"contingent on the financial performance of the businesses being acquired over 2003 and 2004". In other words it is probably paying out of profits generated by GE Compunet.
Computacenter is now comfortably Europe's biggest reseller group, with No 1. slots in the UK and Germany and a top five position in France. For scale, arch-rival Specialist Computer Holdings is its only close competitor in Europe.
Computacenter withdrew from Germany at the start of the year, citing lack of scale. It sold its German operations to GECITS (GE Capital IT Solutions as the reseller group is called in full) as part of a deal which saw it buy its rival's UK and French service ops.
Finally, this looks like the end of GE Capital's expensive dalliance with the computer reselling market in Europe (it remains a big player in North America). GE Capital thought it could make more money than rivals, because it had access to cheaper money. It also thought it could make more money than rivals by acting as a consolidator through acquisition. After all, the techniques had worked in several logistics sectors. They did not work in the European reselling market: except for Germany, GECITS never acquired a commanding position in any country.