Mystery surrounds Westcoast’s Binnian buyout
Back at the end of August, a story appeared on the BusinessPlus website headlined UK Buyer Westcoast Agrees To Acquire Kickham Company. It concerned the acquisition by UK and Ireland based distributor, Westcoast, of a company called Binnian Ltd, incorporated in May 2023 with directors Daniel Kickham and Prosper Kickham.
Westcoast, you may recall, entered the Irish market properly with the acquisition of Clarity Computer (Distribution) back in 2006. This story was based on a merger notification submitted to the Competition & Consumer Protection Commission (CCPC), which stated that Binnian was “a reseller of IT products and ICT solutions and services provider offering a comprehensive range of technology and service offerings to a wide range of private and public sector organisations”.
Given its youth, most people would probably have never heard of Binnian. BusinessPlus helpfully noted that Daniel Kickham established Datapac in 1982 but did not explicitly link the two companies.
The acquisition was cleared by the CCPC on 13 September.
There did not appear to be any announcement concerning the deal from Westcoast.
Noticing the possible connection between Binnian and Datapac, I asked the relevant PR people. They couldn’t provide a response.
After a couple of weeks, I found a link on the UK government company information website which confirmed that Westcoast had taken “significant influence or control” of Datapac (N.I.) on 13 October. That was the same day that Daniel and Prosper Kickham ceased theirs.
Again, I went back looking for confirmation and a statement. Nothing came back.
Final confirmation came not from the companies themselves but from a Public Determination filing by the CCPC, dated 13 September but posted on 28 October. The document carried the same description of Binnian as before but then added: “Binnian Limited has three subsidiaries incorporated in the State, namely Datapac Limited, Datapac Business Solutions Limited and Datapac (N.I.) Unlimited Company (referred to collectively as ‘Datapac’) and operates from premises in Dublin and Wexford.”
So there you are. It’s official. But what does it mean?
Datapac describes itself as “one of Ireland’s largest and most successful ICT solutions and services providers”, adding it has “been at the forefront of technology innovation in Ireland for 40 years”. The company’s roster of vendors includes the likes of HP, HPE, Microsoft, Sophos, Datto, Titan HQ, Cisco, Citrix and VMWare. This year, it won the Sophos Partner of the Year award for the sixth year in succession.
All very impressive. But it begs the rather obvious question: what does a distributor like Westcoast want with a reseller like Datapac?
Westcoast is a distributor of IT brands like HP, HPE, Microsoft, Lenovo, Apple, Lexmark, Samsung and Toshiba. This year, Westcoast Ireland won distributor of the year at the Tech Excellence Awards, so it’s obviously good at being a distributor.
But what does it mean when a successful distributor buys a flourishing reseller? Where are all those things the analysts like to talk about with acquisitions, things like synergies and cross-sell or upsell opportunities?
If you’re a distributor buying a reseller, you’re not getting any of those. If you’re a distributor buying a reseller you don’t want there even to be an appearance of anything like that for the very simple reason that your customer base consists almost exclusively of companies like Datapac. In fact, if you’re a distributor buying a reseller you might be under pressure to demonstrate that the demarcation lines are even stronger than when you didn’t own it.
Speaking from personal experience, I remember that many years ago, Ingram Micro UK owned a reseller. It was adamant that there was no crossover between the two businesses and they were run completely independently but there were still some who looked askance at the whole notion.
Returning to the present day, if you’re the reseller being taken over, are there many out there who, if you asked their managers, would list being taken over by a distributor as one of their main objectives? Taken over, yes, but by a distributor? How does that even begin to work?
You and I don’t know and won’t know until Westcoast and Datapac decide it’s time to publicly confirm what has happened and provide some commentary on what it means and how it will work. Right now, your guess is as good as mine.