Stordata Solutions Plc, the UK information technology group, has placed its plans to acquire a substantial network services company on hold, for the time being. Last week Stordata said talks on the acquisition were at an advanced stage (CI No 3,535). But the board decided that the company’s current low share price, 2.5 pence after a profit warning made it not the best time for acquisitions. The company has, however, completed due diligence on its unnamed target and is now awaiting the ideal time for the purchase, said chief executive Simon Hunt. Stordata currently derives 55%-60% of its revenues from the niche storage products supply business, Primary Storage, which is expected to grow in the coming year in part due to the May acquisition of Mosaic, the storage reseller of Cedar and ProCom. Primary Storage is a value added reseller in the notebooks, laptops, desktops and server market and is under increasing competitive pressure from the manufacturers in the lap and desktop markets. This has resulted in a decline in margins from around 30% to 22-25%, Hunt said.
