£38 million aquisition deal for distributor Exertis

DCC Technology, a £155m-turnover distributor of server and storage products is set to be acquired by a Lancashire-based company in a deal that values the business at more than £38m.

DCC Technology, which trades as Exertis, has agreed to acquire Hammer Consolidated Holdings Ltd for an initial enterprise value of £38.3m. The transaction is conditional on competition clearance from the EC and is on course to complete by the end of the year.

Based in Hampshire and employing 165 staff, Hammer distributes server and storage products for a broad range of leading technology firms including Dell, Intel, NetApp, Seagate and Western Digital.

In addition, it provides product design-and-build services tailored to the requirements of customers in specific industries. Hammer sells to value-added resellers, cloud service providers and system integrators from sales offices in the UK, France, Germany, Sweden, Holland and Belgium.

Hammer’s business is considered to be complementary to Exertis’ existing server and storage business, and will “significantly” strengthen its supplier portfolio with the addition of almost 1,000 reseller customers.

In its financial year ended 31 January 2016, Hammer earned an operating profit of £6.3m on revenue of £155m.

DCC has agreed to acquire 100 per cent of the issued share capital of Hammer based on an initial enterprise value of £38.3m. The consideration will be paid entirely in cash and is structured as an initial payment at completion, followed by earn-out payments over three years based on Hammer’s future trading results.

Tommy Breen, chief executive of DCC, said: “The acquisition of Hammer will significantly strengthen the product and service capability offered by Exertis to its reseller customers. In addition, Hammer’s expertise will better enable us to take advantage of positive industry trends, including growth in cloud data centers and demand for big data analytics.”