Small IT suppliers vulnerable to takeover, study suggests


Small IT suppliers vulnerable to takeover, study suggests

Martin Kearney

Small UK computer manufacturers and distributors are becoming more vulnerable to takeovers by larger rivals, according to research.

The report by Plimsoll Analysis suggested almost 30 UK companies have a "danger" rating, indicating financial difficulties with a high chance of failure.

Report author David Pattison believes "another round of consolidation" is on the horizon, with large companies scooping up smaller competitors at a discount.

"With their finances already stretched they have little left in their arsenal to fight back," he said.

A sluggish marketplace is being blamed for the findings, with smaller UK computer manufacturers and distributors taking the brunt of the market downturn.

Sales figures from 80 of the companies surveyed have shown a steady decline since 2009, with increased competition and decreased demand taking their toll.

Almost half of the 154 companies with assets less than £3m were thought to be particularly vulnerable to takeover attempts.

Plimsoll also pointed to smaller companies' inability to call upon the resources of their larger rivals as a factor. "Large companies can call on banks and parent companies, smaller companies are increasingly running out of cash," he said.

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