Current conditions could foster further consolidation

The current market landscape could benefit those that are looking to grow their operations through merger and acquisition (M&A) activity, with more consolidation also possibly being on the way.

Not only has the current pandemic made some businesses be potentially looking for a sale as a way out of a stressful situation, but others are eyeing up targets as a means of growing the business at a time when gaining new customers is particularly difficult.

Speaking at the Canalys Channel Forum EMEA, the boss of SCC, James Rigby, indicated that the business could do so small acquisitions to bolster its customer base.

Rigby has driven the business through acquisition and has been open about the firm’s willingness to spend to bolster its business.

“We won’t be doing anything huge, but new business is always a challenge for all of us. SCC, along with a number of the other bigger players, have that end-to-end capability on the infrastructure, so we have broadly got the portfolio of services we want and we now need to layer volume on top of that, and more clients,” he said.

“Acquisition of smaller players is a way to harvest those clients quicker than you might see through sales recruitment. We won’t do anything huge, that would be too risky, but we are definitely looking at smaller deals to harvest clients in the UK, France and Spain.”

Rigby added that there was still plenty of life in the resell business and, although it had moved into the managed services space, there was a lot of resell happening, particularly across its French business.

“Reselling is here to stay and we absolutely want to be a part of that,” he said. “We want to cover all aspects of what our clients need from us.”

There have been several deals struck during the Covid-19 period, with Ricoh buying MTI Technologies and Sabio picking up Anana, as just a few examples from the past seven days.

But channel players are being careful to weigh up the risks of making significant moves at a time of uncertainty. In his Canalys session Mike Norris, Group CEO at Computacenter, said that the company had balanced the risks and been cautious about going ahead with its offer for Pivot as it looked to expand its US business.

Norris said he had wanted to go ahead with a deal in February, but the board was concerned about the pandemic. Once it became clearer in June that the business was weathering the storm, it put in a bid and the whole deal had been done virtually.

The deal should close subject to shareholder approval by the end of the month, and it will be able to move towards combining the latest addition to its existing US business with FusionStorm.