SOLD: Dicker Data snaps up Exeed in landmark $68M deal
Dicker Data's share price will be the one to watch after the company confirmed it will acquire New Zealand IT distributor Exceed, in a landmark deal worth $68 million.
The deal will propel Dicker Data NZ into becoming the second largest IT distributor in the country, with estimated revenue of more than $500m for the combined entities.
Current Exeed chief executive Justin Tye will take the helm of the combined company in the newly created role of New Zealand country manager.
Exeed is currently the second largest IT distributor in the New Zealand market, and holds dominant market share across a number of the vendors they represent.
With operations expanded into Australia in 2016, the Exeed business represents combined revenues of approximately $380m, with FY21 earnings expected to reach $15m.
According to a company statement, the scale of the combined entity will enhance Dicker Data's value proposition to New Zealand resellers and will provide the local market with access to every major technology brand under the one banner.
"After many attempts, over more years than I can count, we have finally got a deal done to acquire Exeed," says Dicker Data chairman and chief executive, David Dicker.
"This transaction will put us a very strong number two in New Zealand, with a platform for number one. The combined companies are highly synergistic. The deal done will be all cash. A very satisfying outcome," he says.
In addition to the $310m of revenue in the New Zealand market, the acquisition gives Dicker Data NZ access to $70m of revenue in Australia, across a vendor base that has no overlap with existing Australian vendors.
Dicker Data will take ownership of the Exeed portfolio that includes high profile brands such as Apple, HP, Hewlett Packard Enterprise and Microsoft.
Exeed carries a number of exclusive distributorships in New Zealand including Motorola, Ruckus and Webroot, and employs a total of 119 staff, with 95 based in New Zealand and 24 in Australia.
"As a locally owned and operated distributor in New Zealand, Exeed shares many cultural similarities with Dicker Data," Dicker says.
"Their ability to outpace all foreign rivals in their local market is testament to the strength of the business and the team being acquired.
"The competitive advantage a local distributor brings is deeply engrained in Dicker Data's DNA, and every reseller partner who works with either business today should be reassured that the seamless continuity of their business is the utmost priority as Exeed is integrated into Dicker Data."
Dicker says these cultural alignments provide a strong foundation for the integration of the Exeed Group into Dicker Data.
"The opportunity provides a solid customer base of nearly 1200 resellers, growth in market share and revenue, plus immediate gain of skilled and specialist experts and a cultural synergy between the two companies."
The acquisition funding is supported by a cash advance facility from Westpac. Dicker Data expects to complete the transaction before the end of August 2021, with the transaction expected to be earnings accretive for the FY21 financial year.
