Tech Pacific New Zealand head Tony Butler says he was happy to have the chance to buy a stake in the IT products distributor as part of its sale to investment company CVC.
CVC last week bought 58.5% of Tech Pacific from Dutch owner Hagemeyer, after first showing interest in it in late 2000. At that time the parties couldn’t agree on a price.
This time around CVC’s confidence in the deal was boosted by the retention of 31.5% of the company by Hagemeyer, and 10% by Tech Pacific management, Butler says. The deal values Tech Pacific, which has operations in seven countries, at $A345 million, he says.
“I think they’ve got a good buy; that’s why I was keen to buy into it.”
Tech Pacific New Zealand had turnover last year of $417 million; in Australia, the company did about $A1000 million of business.
Butler says the modest-seeming sale price reflects the low margins of IT distribution. Tech Pacific New Zealand’s gross profits last year were less than $40 million.
“I tell my staff that we need to think like a $30 million company. We don’t have the margin for mistakes of a $400 million one.”
As well as Butler, a handful of senior New Zealand Tech Pacific managers will be entitled to buy a stake in the company.
CVC, which is based in Europe and Asia, will be an “active” manager, but at board level, rather than hands-on, Butler says.
“There will be more opportunity under CVC to consider alternative ways of growing, other than organically.”
That means by acquisition, but Butler says there are no targets for that sort of attention at present.