The changing nature of distribution will have played a key role in the timing of Westcoast and ALSO’s decision to finally merge after years of “flirting”, analyst Steve Brazier has told IT Channel Oxygen.
Switzerland-based ALSO this morning announced that it has reached a deal to join forces with UK peer Westcoast.
ALSO and Westcoast turned over a respective €11.1bn and £4.2bn in their latest years, meaning their combined sales will rival European market leader TD Synnex’s $19.4bn tally.
Talking to IT Channel Oxygen, Informer Fellow Brazier said that the duo had been “flirting for a long time”.
Westcoast once tried to buy ALSO predecessor Actebis, while ALSO and Westcoast were for a few years both part of the European Wholesale Group. Today, ALSO supplies Westcoast with its ALSO Cloud Marketplace.
“Strategically, it’s been an obvious move for a long time,” Brazier said.
“Westcoast is leading the UK. ALSO is leading across Europe. Culturally they are aligned.
“If you’re going to ask the question ‘why now’? the world of distribution has become more based around the tools and systems, particularly cloud marketplaces, and it doesn’t make sense for both to develop independent systems.
“It makes much more sense to get scale through one system, so there are obvious synergies there.
“I think ALSO was impressed by the consistency of Westcoast performance year in year out.”
ALSO’s rising share price – Brazier says it is by far the best-performing distribution stock since lockdown (see here for more) – will also have made a deal easier, Brazier observed.
As for why it has not been characterised in the official comms as an acquisition but, rather, an “alliance”, Brazier said the duo would be “keen to present it as a merger of partners”.
“[Westcoast chairman] Joe [Hemani] will continue to be involved,” Brazier stressed.
“It’s great for Europe to have a strong leader in this business,” he concluded.
Doug Woodburn is editor of IT Channel Oxygen
