EMJ Data Systems Ltd. said Monday it has bought fellow distributor Daisytek Canada, effectively doubling the size of its business.
The
combined revenue of the company is now $400 million, said EMJ president Jim Estill. The acquisition will allow him to gain another market: supplies like toner cartridges and ink.
“”We’re a niche distributor and they’re in a niche, which is supplies. We’re financially strong; they needed a financially strong partner,”” said Estill.
Daisytek Canada’s parent company, Daisytek International Corp., filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in June.
“”The Canadian company was always profitable and doing OK, but they had a parent that over-expanded and got into some areas they shouldn’t have. That’s what caused the problem,”” said Estill.
Estill bought the subsidiary in a subsequent sale for an undisclosed amount. He said the price was below market value, but “”we were still the highest bidder, so we did pay a good dollar for it.””
Daisytek Canada will retain its name, its staff of 95 and offices and function as a separately-run subsidiary to EMJ. The company has offices in Markham, Ont., Vancouver and Montreal. EMJ is headquartered in Guelph, Ont., and also has offices in Vancouver and Montreal.
“”It will be run as-is by the existing staff. It’s a good, well run company. It’s not a lame duck,”” said Estill.
The news that Daisytek Canada would be purchased by EMJ came as something of a relief to the company’s vice-president of sales and marketing, Suzanne Barrette. Daisytek Canada was shielded financially from the bankruptcy proceedings of its parent, but it still took a toll.
“”It caused certain difficulties on us, because obviously when the parent goes under Chapter 11, the community, the outside audience, is concerned about what’s going to happen with the different subsidiaries,”” she said.
“”We think the (acquisition) will take us to the next level as far as where we want to position ourselves in the Canadian marketplace. It’s business as usual. The team will be intact and they will do what they do best,”” Barrette added.
Microcad, a London, Ont., reseller that does business with EMJ, said the acquisition may be an opportunity to expand its inventory. “” If (EMJ) can be competitively priced on supplies we could entertain some quotations on those products too. I don’t think EMJ used to carry supplies, if they did they didn’t specialize in them,”” said Microcad’s Jim Bains.
Media supplies are a growth market right now, “”especially with photo printers,”” said Estill. “”It’s one way we can help resellers make money, because this happens to be a slightly higher margin, incremental business for them.””
Estill said that there could be some opportunity for cross-promotion between EMJ’s and Daisytek’s product offerings.
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