Shareholders approve Renaissance-Exeed deal
Exeed's acquisition of distribution business proceeds as plannedBy Simon Eskow, Auckland | Friday, 06 July 2012
Renaissance shareholders have agreed to sell the company's distribution business to Exeed.
"The meeting today heralds a new day in the life of Renaissance Corporation," Renaissance chairman Colin Giffney says in an announcement. "Six years ago when I joined the board Mal Thompson, Paul Johnston and Clive Lewis told me that something would happen in the Apple relationship, they just did not know what. Today marks the end of the 'did not know what'. "
Exeed was expected to pay about $5.3 million for Renaissance’s IT distribution business, most of that for stock and goodwill. Renaissance will not compete with Exeed as a distributor for five years, but will continue to do business through two entities: the Yoobee Apple retailer stores, and the Yoobee Design College, formerly known as NatColl.
"As we look forward – PD (post distribution) – as we call it, we are a radically different company," Giffney says. "Now, in terms of value, we are predominantly an education business."
Exeed has been moving ahead with preparations.
“Our business priority now is to sort out the preconditions and the requirements that need to be in place to absorb that business into our existing business,” says Justin Tye, Exeed’s CEO. “It’s a lot of work, but we’re pressing ahead because if it goes ahead, we’d expect that the businesses would operate as combined entities by July 16. It would not leave us enough time to get these systems in place if we waited.”
Exeed has no current plans to move from its headquarters in Parnell, Auckland, to accommodate its expanded staff, but it is considering relocating its warehouse.
In addition to Renaissance’s Apple distributions business, the deal adds Fuji Xerox, Cygnett, Belkin, and Ozaki to Exeed’s portfolio
Preparation work for the acquisition has included staff planning and technical upgrades. The company, which employs about 40 people now, has been considering which Renaissance staff it would bring over to its headquarters in Parnell, Auckland.
“I’m trying to figure out if it’s going to be all of them or not quite all of them,” Tye says. “I can tell you it’s certainly the majority. And they’re aware of that.”
Tye says Exeed is also employing a programmer to support the transition to its software, to avoid operating two separate CRMs.
Tye says the acquisition was intended to take Exeed beyond the limitations it seemed to have reached with its current portfolio.
“An IT distributor is in it either as a logistics player, serving resellers that know what they want and you simply supply them with kit,” says Tye. “Or as a niche player, adding a lot of value to the transaction, and in a sense helping the resellers close business in exchange for commanding a higher margin.”
“We do sit on both sides of the fence in that regard and we realised where we are with HP, Samsung, Netgear and so on, that the next stage for us was to push ahead to a step change in our business. The work we’ve done with HP over the last ten years, we’ve got quite remarkable results for them. We defended nicely their patch from competition from Dell, IBM and others.”
Tye says expanding with Apple business will help dispel any exclusive association of Exeed with HP.
“We’ve sat around the board room table enough times to realise that the only way to achieve the growth that we’ve wanted was getting an agency like Apple or an IBM, but those don’t just fall in your lap. They’re hotly contested,” Tye says. “When the opportunity to look at the Renaissance business came up we took it. And quite a long time later we managed to close the deal.”
Exeed, meanwhile, is set to embark on a radio campaign to draw attention to its mycloudstore portal, which allows end users to purchase a SaaS product — including Airwatch, SMX and Salesforce.com, among others — and nominate a reseller so the transacation “will still be a channel led solution”.
As of earlier this year, Exeed was doing business with about 2000 regular channel partners, but Tye did not know what that number might increase to with the integration of Renaissance’s ecosystem.
“It’s just nice to be the New Zealand business that is able to pull something like this off,” he says. “We’d thought that it would be most likely swallowed up by a multinational distributor.”
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