Going public or staying private it’s a double-edged sword. And I’m not just referring to the intense caution with which some in the channel community share information with us media, but to being open to sell the company’s stake in the secondary market, or to acquisitions and mergers.
Sahara Computers and Electronics, a joint venture of a South African-registered company and the Sahara Pariwar, bought out “son of the soil” distributor SES Technologies’ distribution business, an announcement made yesterday, which caught many of us by surprise. SES being a target for acquisition was indeed doing the rounds of the grapevine for at least the past 6-7 months, but who would have thought Sahara would be the buyer?
The US distributor TechData and Middle-East value-added distributor Mindware were said to be in the running, and it was only at the last minute that Sahara won by making a better offer. We could only speculate now on which other local distributors the losing bidders would now approach, but I see this as a logical next step for many who have been constantly getting regular mention in the media over the past two years. One distributor got 25 mentions since May 2005, another got a similar number in 12 months (still at least twice per month). And these are not like the Tech Pacific-Ingram Micro deal.
SES now has funds to grow faster than the market. Sahara will gain, so will other vendors who partner SES. Soon, others will have them too.
One thing with funds is, if you don’t know what to do about it, it’s not much use going either public or seeking private funding through investors you better use your working capital to grow. Because soon you’d be flooded with demands to see returns for investor money. A look at some of the success stories, and you’ll know understand your real needs, spend time debating with your core team and preparing yourself, evaluate options.