Managing directors draw up merger and acquisition plan, which includes more acquisitions in the United Kingdom
Econocom says it is on the verge of concluding a number of mergers and acquisitions across Europe as it seeks to double its turnover over the next three years.
The Euronext-registered reseller, which generates € 2.5 billion in revenue throughout 2021, recently set out its ambition to reach € 10 billion in sales by 2030.
The goal is part of a new business plan that was formulated last year after several years of transformation for Iconocom.
The reseller endures the turbulent 2018. It had to issue a warning about investor profits after periodic operating profits for the first six months of the year fell 43 percent to 34m euros, leading to a sharp drop in its share price.
Its founder, Jean-Louis Bouchard, regained control of the business later that year by his son Robert Bouchard to calm the ship.
Econocom then undertook a two-year transformation plan to reduce its debt by hiring a consulting firm, McKinsey, to help with the process.
Then the merchant undertakes to sell several of its subsidiaries in 2019, including UK-based mobility and wireless provider Jade Solutions.
Economo came out of the transformation plan at the end of 2020 with a new strategy to focus its efforts on three main businesses: product and solution sales, services and the leasing business known as TMF (Technology Management and Finance).
We can be a big company, be profitable and highly developed, but we can’t do everything everywhere
Speaking of CRN, The executive managing director of the Econocom group, Angel Benguigi, said Econocom had learned from the mistakes of its previous acquisition plan, which ran from 2014 to 2018.
During this period, Iconocom acquired about 30 companies, some of which proved useful for its overall strategy, while others deviated from their core business.
Econocom will now focus only on the resale of products and solutions, as well as leasing in its 16 countries, while investing in services only in France, Belgium and Spain.
“We can be a big company, be profitable and highly developed, but we can’t do everything everywhere. When we focused on the strategy, we thought about leasing on the one hand, resale with services on the other and services on the third. But services are a very wide world; you have Accenture, you have T-Systems, you have Capgemini, you have very big companies, “he said.
“For now, we have decided to develop services only in France, Belgium and Spain. Why? Because we have learned that when we acquire many companies – in the field of cybersecurity, in the cloud, in hosting – these are small companies that are not scalable. Instead, we want to focus on services where we can be leaders. For example, in France, Belgium and Spain, we are leaders in outsourcing workplace management. This is something that needs to be developed. But we don’t want to go back to buying companies with some knowledge that we don’t have and that won’t be scalable. “
Benguigui said Econocom “has sold almost everything we wanted to sell”, but said three or four more businesses will be sold next year.
The sales helped clean up the house, the MD group said, and allowed it to launch a new merger and acquisition strategy over the next few years without increasing its debt.
This journey of mergers and acquisitions has already begun. Econocom acquired UK-based distributor Trams in July last year after its managing director in the UK, Ireland and the US, Francis Weston, said CRN a few months earlier he had sought to acquire a trader in the United Kingdom with revenues of up to £ 150 million.
Bengigi said CRN that Econocom is on the verge of completing the acquisition of a trader with 18 million euros in revenue in Spain. He said this would soon be followed by the acquisition of two “medium” resellers in the Netherlands and Germany, which he expects to close in June or July.
Meanwhile, Econocom’s TMF division acquired the French company SOFI Group in April, marking its first step in the market for updated mobile and tablet devices.
Weston said Econocom continues to scan the UK market for more acquisitions of distributors, saying there are “tons” of companies on the market right now.
“The fact is that some of these companies are too small and have not yet entered this cycle of growth and scale. And this is not necessarily the entry point where we want to succeed,” she said.
“It is really up to us to find an experienced management who is in place, who knows the industry, who is passionate about the industry and who can really share this information with the wider group. That’s why trams were very easy to make, because they were immediately connected to our wider resources, instantly connected to Spain, France, Italy, delivering products to literally every European country in which we operate so far. “
Benguigui added that Trams is the “perfect profile” of the company Econocom wants to acquire, arguing that the potential targets should already be a decent amount between £ 50m and £ 150m in revenue.
“We are really happy with the acquisition [of Trams]. This is an excellent company, very well managed. And that’s really the profile of the company we want to get in other countries. “
Econocom UK recently moved to Trams’ London offices, Weston said, claiming the two companies already share customers and work together.
The company could look beyond the acquisition of resellers in the United Kingdom, arguing that its acquisition of SOFI in France could be followed by similar acquisitions in other parts of Europe.
“We are taking a slow, thoughtful approach to finding the right one for the future. But resellers, recycling, repairs are all we look forward to looking at in the coming years, “she said.