History (1996): After Acquiring LaCie, D2 to Be Listed on New French Stock Exchange

Electronique D2 (Massy, France) is doubtless the largest distributor in France, perhaps in Europe, of peripherals for Macintosh computers. They are, for example, the largest European customer of SyQuest and Nomaï. The company purchases storage units with Quantum, HP, IBM, Sony, SyQuest, Seagate and Yamaha as the principal suppliers, then integrates them into its own boxes, in order to sell the whole package to resellers, some 2.000 in the world, rather than to end users.

D2 is thus comparable to companies such as Formac or Computer Connexion in Europe, or MicroNet or FWB USA.

D2’s story has been one of overall success, given that the firm was founded in 1989, and sales for the last fiscal year (ended June 1995) were FF414 million ($82 million), with net of FF23 million ($4.5 million). The company employs 200 people, who average 27 years of age. It boasts 9 subsidiaries in all the major European countries.

Beginning in 1996, D2 set foot on American soil with the acquisition, for FF60 million ($12 million) of Quantum subsidiary LaCie (Portland, OR), a company set up throughout US as well as Canada. LaCie’s activity is comparable to that of D2, with some $35 million in sales and 40 or so employees. Interestingly, Quantum is now, at least temporarily, a 5% shareholder in D2, since the FF60 million asking price, was paid with FF45 million in cash and the remaining sum in convertible options that Quantum can convert between January 1997 and December 1999 for D2 shares. For its part in the deal, Quantum preferred to part with the subsidiary, which competed with some of its clients. LaCie holds a 3-year exclusive contract for the commercialization of disk drives under the Apple name, which accounts for 30% of its business, and developed 2 reputable software titles: Silverlining for HDDs and Silverscanner for scanners.

France represents no more than 32% of D2’s sales, while the rest of Europe accounts for 45%, the US only 23%.

Storage products (magnetic and optical disk and tape drives) constitute 87% of its business, out of which 22% is for SyQuest drives alone.

Among current stockholders are 2 of the founders, Philippe Spruch, 33, CEO and COB, and Pierre Fournier, 39, GM, who hold 46% and 44% respectively. The third major shareholder, with 10% of the company’s stock, is 3I, a British group specializing in VC in Europe.

In order to finance its development projects, D2 chose to go with the French stock exchange, more specifically the New Market of the Paris Stock Exchange, rather than the American NASDAQ, which imposes far more severe limits with respect to keeping shareholders informed of company activities.

In order to penetrate the world of high finance, Spruch apparently had to forego his legendary multi-colored suspenders and open-necked shirt in favor of a classic dark suit with tie.

D2 will make a maximum of 360,000 shares (28% of the capital) available to the public, 30,000 of which will be ceded by current shareholders (30,000 alone from Spruch, who will realize a hefty windfall, as will 3I) and the rest from a capital expansion capped at 300,000 shares, at prices from FF390 to FF450 per share. The goal is to raise close to FF100 million. In the end, however, the two major owners will continue as majority holders, with a combined 6 8% of the D2 shares.

D2 plans to relocate LaCie, as well as its own headquarters, to the new 67,000 square foot site sometime in August, with a forthcoming demand for ISO 9000 qualification.

Among other projects, the company envisions establishing a team of software specialists in order to develop a multilingual universal driver, in the manner of Corel, to work with all SCSI peripherals, whether for storage drives or not, compatible with several different OSs (Mac OS, Windows, Unix).

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue 101, published on June 1996.