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Midwich has entered into a binding agreement to snap up fellow distributor Nimans, adding more audio-visual depth to its portfolio as well as gaining unified comms and telecoms expertise.
The deal is worth £27.5m, paid in cash, and is expected to be earnings enhancing to this fiscal year, once it gets the green light and is approved by the Financial Conduct Authority, which should happen during the first half.
For its money, Midwich has picked up a distributor with market heritage that dates back to 1981 and has a strong background in telephony but recognised that convergence was coming and in recent years has beefed up its unified comms, VoIP, security and networking position. Its vendor roster includes BT, Jabra and Yealink.
The firm had to deal with the death of its founder, Julian Niman, back in 2018, after a 32-year stint at the helm of the business, with the firm vowing to carry on his legacy and continue to drive the business forward.
In its latest audited financials, for the year ended 31 December 2020, Nimans reported revenues of £114.3m and pre-tax profits of £5.8m. Net assets (excluding net cash balances) stood at £11.4m. The business employs about 200 staff and works with 2,500 telco, IT and retail customers.
“Nimans is a long-established business with a great reputation for technical excellence, customer service and logistics,” said Stephen Fenby, Midwich Group managing director. “Its traditional telecoms market has experienced significant change in recent years, bringing with it new revenue opportunities, which the company has developed strongly, in areas such as unified communications, video-conferencing, security and networking.”
Fenby said Midwich was continuing to grow its UC business and Nimans would boost those efforts, bringing in more skilled staff and expertise around services.
“I believe that the combined skillsets and capabilities of Midwich and Nimans bring a unique offering into the market with the ability to provide complex solutions involving multiple technologies,” he said. “I look forward to welcoming the whole Nimans team into the Midwich Group.”
Last month, Midwich updated investors on its progress in 2021, indicating that it had a strong finish to its fiscal year and is now expecting to report revenues 20% higher than previously expected, about £850m. Adjusted pre-tax profit was also expected to be solid and come in at £31.5m, also ahead of previous expectations.
The distributor has also used acquisition as a way to expand the business, with NMK, eLink and Intro 2020 all contributing to its bottom line last year. Already in 2022, the business has taken a majority stake in Cooper Projects, parent company of distributor and video security expert DVS, as it looked to expand its knowledge and customer base in that area.