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Computerlinks receives takeover offer

by Stuart Wilson, Wednesday 18 June 2008

IT security and internet solutions distributor Computerlinks has received a takeover offer from Platin 274, a fund managed by Barclays Private Equity, which values the company at US$162m (€104m) – a premium of 38.9% on the Frankfurt-listed VAD’s share price at the time the takeover approach was announced. Computerlinks’shares soared in pre-market trading this morning by as much as 41% as a result of the bid announcement.

Platin 274 will position its bid as a voluntary public tender offer and is aiming for a minimum acceptance rate of 75%. The bid value represents a 31.6% on the volume-weighted average price of Computerlinks shares for the last three months

Barclays Private Equity has stated its intention to support the company’s long-term development and expansion through both acquisitions and organic growth, should it become the new majority shareholder.

A Computerlinks’ statement regarding the bid approach read: In the context of the company’s further development and its plans for international expansion, the management board of Computerlinks, in principle, welcomes the commitment of a financial investor experienced in the field of medium-sized German companies. The management board has therefore decided, in the interests of the company, its shareholders and its employees, and after having consulted the supervisory board, to thoroughly examine the offer announced by Barclays Private Equity.”

Computerlinks boosted its sales 18.3% to €469.1m in 2007. Fourth quarter sales played a significant role in the company’s annual sales figure, contributing €156.1m to the total – a 20% increase on the 2006 fourth quarter revenues and a third of all sales in 2007.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) climbed 17.2% to €19.2m – an EBITDA margin of 4.1%, which was also the level achieved for 2006. The fourth quarter of 2007 contribute 43% of annual EBITDA for Computerlinks.

Computerlinks after-tax profits for 2007 came in at €10.9m – up 23.9% from a year earlier. Computerlinks focuses on the dynamic Internet technology areas of e-business and e-security, and the emerging area of multimedia networking and home automation. It claims to offer a comprehensive and complementary product portfolio, backed by an extensive range of professional services, to ensure channel partners deliver the right solutions to their customers.

Computerlinks has signed a number of new distribution agreements in recent weeks including with Ruckus, Jacarta and Siemens Enterprise Communications.

CE ANALYSIS: VADs are hot property at the moment in the EMEA market - especially if they are focused on the internet and security solutions space. Computerlinks ticks all the boxes in this respect. Chuck in the fact that it has an impressive vendor portfolio and has already made an acquisition in the Middle East in the shape of Fusion, and it adds up to a pretty impressive package.

Last year’s financials were also strong so don’t be surprised if Platin 274 is joined by some other suitors keen to get their hands on Computerlinks. Some of the world’s largest distributors are already devoting a great deal of time and attention to building up their VAD business as they examine ways to strengthen margins.

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