Clarity, one of the country’s leading technology distribution firms, has been sold to the UK firm Westcoast. The move sees Clarity’s parent company Horizon exit the trade-only distribution business.
Subject to approval by the Competition Authority, Westcoast has agreed to acquire Clarity for €6.2m in cash, payable in two tranches. It will pay out €3.1m on initial completion of the transaction, with the remaining half to be deferred for three months. Westcoast will also assume Clarity’s working capital debt of €9.1m.
Clarity Ireland has long been one of the largest players in the indigenous IT products distribution sector. Its most recent turnover was €118.6m. The company was formed in 1999 through a merger of Horizon-owned Clarity Computer Distribution and the independent firm Gericmar.
Clarity has distribution agreements with some of the leading brands in the ICT space, including HP, O2, Toshiba and Fujitsu-Siemens. It will continue to trade under its own name and Westcoast is to retain the company’s management team and some 60 staff in Dublin. Reading-based Westcoast employs close to 500 people and its most recent turnover was €700m.
The deal is relatively unusual because the trade-only distribution sector in Ireland has traditionally been dominated by indigenous companies, with UK firms tending to have most success in specific niche areas.
By divesting itself of its distribution arm, the Horizon Group said it could now focus exclusively on the enterprise infrastructure and applications markets, both of which are experiencing high growth. As a result of the deal, Horizon added that it would have significantly reduced borrowings and improved flexibility to allocate extra resources its core business in Ireland and the UK.
Horizon CEO Gary Coburn said: “Our objective now is to accelerate the development of our enterprise solutions businesses, both organically and through bolt-on developments and acquisition. With these developments the group is well positioned to deliver earnings growth in 2007 and beyond.”
By Gordon Smith