Arrow ECS Acquires Altimate for Only €48 Million

Arrow ECS and DCC plc have agreed a deal for the acquisition of pan-European distribution company ALTIMATE Group SA.

This sale by DCC, of 100% of the ALTIMATE Group’s shares to Arrow ECS is subject to approval from the European Commission regarding mergers. In the period between the project becoming official and approval from the European Commission, the two companies are not allowed to operate together in the market or embark on any joint ventures – they must remain competitors.

Patrice Arzillier, CEO Altimate Group said: "Before giving further reasons for this project, I want to talk about our last fiscal year, which closed at the end of March. It was a remarkable year: more than 20% increase in our turnover year-on-year; consolidation of our portfolio in our subsidiaries, especially with Symantec Enterprise Security, Oracle, NetApp and IBM; improvement in our key financial indicators such as a largely positive cash flow.

"For the future, ALTIMATE has significant assets in hand: a recognised image and professionalism; strong partnerships; an indisputable commercial momentum. To consolidate these achievements and ensure the development of our Group, I sincerely think that this project for integration with Arrow, worldwide and European leader in distribution, is the best choice. Of course, it will allow us to meet the challenges of our industry. But more importantly, the culture of values at the heart of both our companies, and our complementary resources, will create winning synergies to benefit our partners, whether suppliers or resellers.

"Finally, let me finish with the opportunity for those who have made our company successful: the people working for ALTIMATE. For them, this project will enable them to further develop their skills and know-how within a dynamic and ambitious group."

Comments

Distrilogie was one of the oldest and biggest storage wholesaler in France with a complicated history. From the four founders, Patrice Arzillier, Frank Didi (now at HDS), Philippe Fournier and Serge Valin, only its current CEO Arzillier is remaining.

The firm was created in 1994 in France as Kardinal, a holding company that oversaw Datalogie and Distrilogie, but was dismantled and reorganized in 1998 under the name of Distrilogie, at this time mainly in backup.

It was acquired in 2000 by Irish financial holding company DCC plc group, listed on the Dublin and London stock exchange.

In 2010, Distrilogie changed its name to become the Altimate Group.

And finally it was acquired by Arrow Electronics for €48.1 million of which €41.0 million is payable in cash on completion. In addition, Arrow will take on certain deferred acquisition consideration obligations of Altimate which are currently recorded at €7.1 million.

It's a low price considering that the group announced €282 million in annual revenues and generated an operating profit of €3.7 million in the financial year ended 31 March 2011.

Tommy Breen, CEO of DCC, stated: "The disposal of Altimate is consistent with our strategy to concentrate the focus of DCC SerCom's distribution activities on its retail and reseller distribution businesses, which have strong leadership positions in Britain, Ireland and France and significant opportunities for further organic and acquisition growth."

The wholesaler is represented in eight countries: Belgium, France, Ireland, Luxembourg, Portugal, Spain, The Netherlands and in the UK with a total of around 2,500 resellers.

Among the long list of its storage partners: Brocade, EMC/Isilon, Fusion-io, HP, IBM, NetApp, Quantum, QLogic, Riverbed, Symantec.

Acquisitions of Distrilogie/Altimate:

2004 - Varcity, network security software distributor

2004 - Inforlan, Portuguese distributor

2005 - AB Computing, Belgium distributor

2007 - Scientific Computer, French VMware distributor

2007 - Com4U, Belgium VAD

2008 - Mambo Technology, Spanish distributor

2009 - Numitor, Belgium distributor
2010 - Codework, Symantec distributor in the UK

2010 - SNE, NetApp and CommVault distributor in The Netherlands