The wave of consolidation in Europe’s personal computer retail sector, with US giants moving in to gobble up local players, has completed a cycle this week, with Miami-based CHS Electronics Inc acquiring Metrologie International of France, the last available group with operations in more than one country. The deal followed hard on the heels of last week’s $395m purchase by TechData Corp (Clearwater, Florida) of Computer2000, a major Munich-based computer retailer with operations around Europe, Latin America and the Middle East. CHS is number 3 worldwide and reckons to have returned to the number 1 spot in Europe thanks to the Metrologie purchase, having been temporarily overtaken in Europe by TechData, itself the worldwide number 2, when it bought C2000. CHS estimates that, when it concludes the purchase of Metrologie from Apax Partner & Cie Ventures SA, some $87.7m will have changed hands, discounting what the US group will receive in connection with options it will be buying. CHS chief financial officer and treasurer Craig Toll commented that consolidation has been underway in the European market for some time, and the big US companies have been targeting the continent for acquisitions because it’s a big market but is still quite fragmented. He said that there are economies of scale to be had by purchasing deals which can frequently be struck on a continental level. Metrologie which was founded in 1976, had begun to report losses in 1991, due in part to a troublesome German operation which it has since spun off. It has also shed some 1,700 staff, and reckons to have gotten close to break-even again in the first quarter. It also has operations in the UK and Spain, as well as an assembly facility in Britain to configure PCs for specific end-users. Toll said the company was nicely complementary in its operations to CHS’s own European presence, noting that Metrologie goes higher up the market, into workstations, for instance, than CHS has until now. Will the buying spree continue? While there are no more cross-border retail chains of importance left to buy, Toll quotes research to suggest that there are another 50 European groups with a presence in only one country, but with annual sales of around $100m, so more purchases are likely. He said CHS is currently looking at a potential acquisition in Italy, where it is not present right now, as well as a number in countries where it is already active. Unlike world market leaders Ingram Micro and TechData, CHS does not have retailing operations in the US itself, preferring to consolidate its presence in Europe and Latin America, in both of which it claims to be the number one. In February CHS also bought 80% of SIS Distribution Ltd, a Hong Kong-based distributor with operations in China, Hong Kong, Singapore, Malaysia, and Vietnam, while Ingram is already present in Malaysia and Singapore. TechData is not in that region yet, but ‘Asia will be next,’ Toll predicted.
