Networking distributor Azlan Group Ltd is planning a floatation, following an already chequered history of actual and attempted management acquisitions, and management buyouts. The Wokingham, Berkshire-based firm, which started out in 1984, made UKP3m pre-tax on a turnover of UKP41m in the year to March 31. It is planning to reap upwards of UKP40m from the flotation, according to chief executive David Randall, who said that after the share issue, the existing management will be left with 25% of the equity. Sponsored by S G Warburg Securities Ltd, the flotation will involve a sale of a proportion of all institutional shareholders’ equity. It is primarily a status move. Designed to increase Azlan’s standing among corporate clients, the flotation will enable the distributor to improve support to its 2,000-strong dealer base when dealing with larger clients. In the old days, the three distribution tiers used to work directly with the tier beneath them, so that the dealers would talk to the end users, said Randall. While individual products have become simpler, the interoperability issues are still complex, and we can’t rely on the resellers to present multi-vendor solutions. Anything that we can do to raise visibility and credibility is important. He emphasises his loyalty to the three-tier system, though, and denies any plans to sell direct. The distributor has also been putting its feelers out into Europe, and will use part of the capital raised to fuel that expansion. After German network distributor Adcomp Datesysteme GmbH went bankrupt late last year, Azlan took 10 staff and started up its own operation in January, which started turning in profits three months later. In June, it bought the staff and trade of Adcomp’s former Danish arm, and is still working to get this profitable. Randall plans to take the European expansion further when the existing continental operations are up to strength, possibly moving into the Benelux region. Azlan is no stranger to management politics. In 1989 it was acquired by distribution group Logitek Plc as part of Logitek’s acquisition of Advansys Group (CI No 1,227). Randall led a movement to buy the company back in 1991, for UKP6.5m, using financial aid from CIN Venture Managers Ltd, which is the venture capital arm of the British Coal pension fund, currently owning 55% of the company (CI Nos 1,640, 1,644).
