EMJ Data Systems Ltd. strengthened its point-of-sale (POS) distribution business by purchasing on Monday the Canadian operations of distributor SDMS for an undisclosed amount.
Richmond, B.C.-based SDMS Canada, which began its operations in 1986, distributes point-of-sale, barcode and auto ID hardware, which Jim Estill, president of EMJ, said are some of the areas in which his company is strong.
SDMS’s other Canadian offices are located in Mississauga, Ont. and Dorval, Que.
Estill said SDMS was under financial difficulty and operating under protection from creditors under the Bankruptcy and Solvency Act before EMJ made its offer to the creditors.
“They (SDMS) never really had critical mass — they’re not quite big enough to make it go. But within my business it is very synergistic.”
Estill said that from a reseller’s perspective, the reason that the point-of-sale area should be of interest is that it still rakes in higher margins. “People don’t tend to go to Zellers to buy their cash drawers and that sort of thing,” he said.
The acquisition is EMJ’s second in the last month. On Aug. 9 the distributor purchased the inventory and customer lists of Empac, a Markham, Ont. reseller which declared bankruptcy in May.
Unlike the Empac acquisition, where EMJ was primarily buying a lot of inventory for pennies on the dollar and getting great deals, Estill said the SDMS purchase is more strategic. “I’ve offered one third of SDMS staff positions within EMJ. And I hope to continue servicing their customers as well as offering some of their expertise to our customers.”