Market cannot support current reseller population

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Market cannot support current reseller population

Alex Scroxton

The ravages of the recent recession mean that the UK IT market can no longer support the number of resellers operating in it, and a more aggressive M&A scene is the only conceivable result, say analysts at Plimsoll.

The latest report on the dealer community by the analyst firm has revealed a deeply fragmented industry, with 388 companies rated as strong, 144 companies thought to be in serious trouble, and up to 177 potential acquisition targets.

The Home Counties were found to have the most at risk resellers, with 59 firms in danger of going under, and 61 potential acquisition targets. Comparatively, Scottish companies, although fewer in number, seemed to fair better.

Expressing surprise at the gulf in the market, report author David Pattison said: "The market, in the current economic climate cannot support this many companies. There has to be further, radical consolidation.

"Strong companies will be buying up distressed competitors in the next 12 months," he concluded.

ANS managing director Paul Sweeney said that he was already seeing growing signs of a squeeze.

"We're in good shape, but if you're not at the top of the game as the market tightens some players will start to struggle," he said.


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