ASX-listed IT vendor and distributor Legend Corporation will pay $25 million to acquire Australian electrical products distributor Cable Accessories Holdings (Cabac).
Legend would pickup 120 Cabac staff in Sydney, Melbourne, Adelaide, Brisbane and Perth and around 4000 electrical and IT product line items.
The acquisition sees Cabac’s majority owner Gordon Ketelbey say goodbye to the company that he founded in Australia in 1982. Ketelbey would stay on as a consultant to Legend and had the option to join the Legend board at a later date.
Cabac was traditionally an electrical wholesaler but over the past few years, had entered the computer wholesale market.
Commenting on the acquisition, Ketelbey, who was approached by Legend in March said, “It’s a shock to the system. It hasn’t really sunk in.”
Bradley Dowe, CEO at Legend told CRN the acquisition was a “beautiful fit” and Legend would now have the capability of providing every component within a server right back to the “power point”.
Cabac’s back-end distribution and sales system would be integrated with Legend’s infrastructure, Dowe said. However the Cabac name and offices would remain.
Legend expected to complete the deal by the 3rd of July. It would pay a maximum of $25 million in cash based on the achievement of EBIT of $5.4 million for the year ending 30 June.
Cabac reported revenues of $46.2 million last financial year and expected to report revenues of $53 million this financial year.
Legend shares were trading at 79 cents per share on Wednesday afternoon, following the announcement.
Legend buys Cabac for $25M
By Byron Connolly on May 10, 2006 2:52PM