Insight Enterprises Inc, the Tempe, Arizona-based computer direct marketer, has paid $150m for UK-based distributor Action Computer Supplies Holdings Plc in a move designed to create a global direct marketer of brand name IT products. The joint company will have annual revenue of around $1.6bn and a common customer base in the SME market.
The merger will herald a push to expand operations in Europe as Action has just a Spanish subsidiary while Insight only arrived in Europe in December 1998 by acquiring German direct marketer Computerprofis Computersysteme GmbH for around $8.4m in December 1998 (CI No 3,562).
The two companies have both found their niche in the SME sector which enables them to avoid battling it out bigger competitors at the top end of the market or expensive after sales service with demanding domestic customers.
Insight sees big growth potential for the merged operation, pointing out that they each have only 20% of their target market. The two companies concentrate on sales over the telephone or web site and believe the combined operation will significantly increase their buying power.
In its last financial year to August 28, 1998 Action reported revenue which rose 45% to $410m while Insight increased its revenue last year by 60% to $1bn.
