Econocom looking to acquire UK reseller with up to £150m revenues

MD Frances Weston tells CPI exactly what profile of UK reseller the French giant is looking for

Econocom is looking to buy a UK reseller with revenues of between £50 and £150m by June, according to MD Frances Weston, as part of an ambition to become "Europe's largest digital contactor".

Speaking to CRN's sister title Channel Partner Insight, Weston says that the France-HQ VAR giant is looking specifically for a reseller with Apple, Lenovo, HP and Microsoft certifications.

She said the rationale is to try and build Econocom UK's business in the private enterprise market.

"Up until now Econocom in the UK has very much been focused on schools and education in the public sector, which we have a very large footprint in and I'm very proud of.

"We are now looking to branch out and go more into corporate business to business, and we believe a UK IT reseller will be able to add to this strategy.

"Because we are the largest contractor in many countries, but in the UK we haven't necessarily propelled to the same level of success because we haven't focused enough on large scale corporates, which is why I was brought in."

Weston's background is in the banking sector with M&A expertise. She's been at the helm of the French VAR's UK business since March 2020.

When asked what profile of partner she is looking to acquire now, she said one with roughly a 50/50 split of traditional resale and services sales.

"We're looking for companies that have the ability to grow and reach into managed services," she said.

"So the idea is that they are focused more on hardware and software sales at the moment.

"And they are perhaps less focused or haven't had the time attention or hire the expertise to be able to bring in the managed services element. Or it's just growing slowly but surely."

She added that a second UK partner acquisition may then be used to bolster that services revenue.

"Maybe at a later date, when we're growing in terms of revenue and strength as a team with this IT reseller we might decide to hire people from from a managed services company and grow it that way. Or we could go in and acquire another managed services company."

Speed is of the essence for the Euronext Brussels-listed firm, with Weston setting a soft deadline of making a deal within the next three months.

And she's confident that Econocom UK can start competing with the larger US channel stalwarts that are already operating in the UK enterprise market.

"We believe that the larger conglomerates, so the CDWs of the world, the Tech Datas of the world, and the Westcoasts of the world, are wonderful and compelling.

"But we think that there is much more of a personal touch that we can work with by doing it this way."

The French partner has by no means escaped unscathed by the COVID-19 pandemic.

In its recent Q4 forecast, Econocom Group says it predicts revenues for its full year to 31 December 2020, will tumble by 11.3 per cent to €2.6bn.

However, Weston says that it has been able to honour its debts and "drastically reduce structural costs" to come out of its FY 2020 with strong cash reserves.

She says the it's that capital which the French reseller will use to fund its UK expansion. As well as one in North America later this year.

"We're lucky because we have the cash to do it. Last year, in terms of cash, we were in about €500m of debt at the beginning of the year. But we ended in a positive of €20m," she said.

"And I like to move quickly. I'm a banker by trade, so I like to be efficient.

"It needs to be an organisation that really wants to change, but doesn't necessarily want to leave.

"Perhaps an entrepreneur that started from scratch, but wants to cash in their stake and still be involved in the organisation.

"That for me would be the ideal candidate."

Econocom Group currently has over 10,000 staff in 18 countries. The group has made 40 different acquisitions across Europe in the past two decades.