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Electrical retailer, Dixons, has entered into an agreement to dispose of its Equanet operations to Kelway. The disposal comprises the IT reseller activities based in Bury, Lancashire, along with the Equanet brand name. Details of the transaction were not released, but the deal is expected to complete later this month.
Kelway is on a mission to become a £500m business, and the Equanet acquisition is part of that master plan. We caught up with Kelway CEO, Phil Doye, to get a little more detail on what Equanet adds in terms of services capabilities, and a couple of points caught our attention. Firstly, Doye says that with the addition of Equanet, Kelway will be able to target more SMB organisations (which Kelway defines as sub-1000 users) with Kelway’s cloud services. He claims that the “ServiceWorks” cloud platform (comprising compute, mail and backup services) is starting to gain “meaningful traction”, with the pipeline contract value for FY13/14 currently sitting at £20m. He hopes Equanet will add to that.
Secondly, there is the potential for Equanet to reinforce Kelway’s end user computing capabilities, specifically around “Bring Your Own Device” and mobile device management. Equanet has a heritage in client deployment and an established relationship with Apple. Kelway believes that the combination of that and Kelway’s existing capabilities – including its relationship with VMWare and Citrix– “represents a huge opportunity”. Equanet’s position as a Large Account Reseller for Microsoft will also help Kelway as it looks to deepen its relationship with the software giant from both a strategic and commercial standpoint.
In all, Equanet looks to present several opportunities for Kelway in terms of software and services. However, the bottom line is that Equanet is a hardware reseller firm by heritage. While we question the value of buying lower-margin resale businesses generally, we retain an open mind based on the potential to grow the more profitable related software and IT services.
