New Zealand IT company Renaissance has agreed to sell its IT distribution division to fellow kiwis Exeed Limited, subject to shareholder approval.
According to a statement submitted to the NZX, under the terms of the deal Exeed will take over distribution deals for brands like Apple and Fuji, as well as fixed assets worth around $570,000 and stock worth around $2.5 million.
$2.3 million will be paid for goodwill associated with the business.
Renaissance CEO Shaun Rendell says both companies believe the time has come for rationalisation in the New Zealand IT market.
"Renaissance has had a long association with Apple in New Zealand," Rendell says.
"We are proud of the way we have represented the brand for over 27 years. The time had come to get bigger in the industry or get out. We admire the Exeed team and we are pleased, with Apple's blessing and subject to shareholder approval, to hand the brand on to them."
Exeed CEO Justin Tye says he's delighted that Apple and other key Renaissance brands are happy for Exeed to represent them in New Zealand.
"We trust the Renaissance shareholders approve their board's recommendation," Tye says.
The sale leaves Renaissance with two businesses: its retail unit, Yoobee, and the Yoobee design college, formerly Natcoll.
Company chairman Colin Giffney says in a statement that the sale - indicated as early as September last year - 'dramatically' changes the shape of the company.
"The balance sheet is halved," Giffney says.
"Net interest bearing debt disappears. The operating risk around the distribution business is eliminated. The remaining businesses are much less volatile. Neither of the businesses is working capital hungry."
Exeed have indicated they won't be purchasing all of the stock in Renaissance's distribution business; Renaissance will aim to sell the remainder but there are likely to be some write-offs.
Renaissance's Onehunga building will also be sub-leased to Exeed. As for staff, Exeed will take on 'most' of the distribution division's staff, although 'Renaissance will be responsible for some redundancies'.
As part of the deal, Renaissance has agreed not to compete in the distribution business for five years.
Renaissance shareholders will meet to consider the sale on July 6, and settlement is expected to take place on July 16.