Bell Micro Wednesday said it would acquire Forefront Graphics as part of its bid to expand the depth of its distribution business in the data storage market.
Fifteen-year-old Forefront Graphics Corp., which is based in Toronto and employs 30 people, will keep its name and act as a separate entity. Financial terms of the deal were not disclosed.
Forefront has been a mainstay of the Canadian graphics community, specializing in video and audio products from the likes of 3D Labs, Matrox Graphics and Pioneer. It has been profitable for most of its history, and saw a $3 million increase in sales last year.
Bell Micro, on the other hand, is best known for the strength of its data storage lineup. The company first arrived in Canada three years ago when it purchased the assets of Tenex Data.
Peter Diniz, vice-president and general manager of Bell Microproducts of Canada, said the acquisition evolved out of a long-term business relationship he had formed with Forefront Graphics vice-president of sales Frank Squizzato. Diniz, who describes Bell Micro as a “boutique distributor” adding value in a specific niche, said the addition of Forefront does not mean Bell Micro is straying from the territory it knows best.
“Our core market still is storage,” he said. “Our migration is becoming a solutions provider, and particularly a data storage solutions provider.”
Forefront, in fact, has been making its own inroads to the storage market, particularly with storage area network (SAN) solutions that offer a remedy to large enterprises with video tape collections, for example, that need to digitize their assets.
“The vertical markets they focus on are very complementary,” he said. “Whenever you talk about digitizing data, it’s very storage-intensive.”
Diniz did not rule out the possibility of layoffs, but said they would most likely occur in the back end of the business like accounting and finance departments. “We’ll certainly do some rationalization there,” he said, adding that the Forefront sales force would likely stay intact. “They’ll be separate from a reporting mechanism . . . but it only makes sense for the Forefront sales person to work out of the same sales office as the Bell Micro person.”
Forefront has offices in Toronto, Ottawa, Montreal, Calgary and Vancouver, while Bell Micro Canada is in London, Montreal, Ottawa and Vancouver in addition to its Toronto headquarters. Squizzato was not available for comment at press time.
Though Forefront has had what Diniz calls “a casual U.S. presence” to date, the plan is to first integrate the two companies before expanding south.
“We probably give them financial clout and depth and reach they would not realize,” he said. “They, on the other hand, have a set of business disciplines and practices that we’re very interested in taking a closer look at. We’re not that different — we both specialize in set markets.”
Though this is one of the first major acquisitions Bell Micro has made in the Canadian market since arriving here, its U.S. parent has been busy looking for acquisition partners overseas. Last week the company said it would buy Netherlands-based data storage provider Touch The Progress Group.