SCH makes £2m move for Interface

Server and storage distributor finally finds a willing buyer

Doug Woodburn, CRN 04 Jul 2008

Server and storage distributor Interface Solutions looks to have finally found a buyer in the shape of IT giant Specialist Computer Holdings (SCH).

SCH has tabled a £2m cash offer for the distributor, a subsidiary of Alternative Investment Market (AIM)-listed investment vehicle Fayrewood.

SCH already works in the distribution space through its ETC subsidiary, and Interface would add 130 staff and clout with vendors including IBM, Lenovo and Sun Microsystems. Interface has a turnover of about £130m.

The proposed deal would also include SLS, a much smaller unit Fayrewood set up in September to focus on the loan of IBM X-series servers.

Fayrewood has been looking to offload Interface for several months and was rumoured to have come close to a deal with CCD – the distribution arm of Computacenter – earlier this year. Interface and SLS are Fayrewood’s last remaining interests following its recent sale of Spanish UMD and French Banque Magnetique.

Through its Prime Properties Development subsidiary, SCH has offered Fayrewood £1.98m cash over 12 months. £976,000 would be paid on completion on the deal, followed by two further tranches of £500,000 after six and 12 months, subject to potential warranty claims.

Fayrewood’s board is unanimously in favour of the disposal, and is hoping to gain backing for the move from shareholders at an extraordinary general meeting (EGM) on 24 July.

James Rigby, managing director of SCH UK, said: "We see Interface as a real complement to our existing distribution business with significant growth opportunities. Its specialist distribution expertise and excellent brand reputation will add value to our offer and deliver enhanced value to customers. This deal makes great sense to ETC, to Interchange, to ISI and to our channel customers. It's a cracking deal and we've got our fingers crossed that it goes through."

David Kleeman, non-executive chairman at Fayrewood, said: “I believe we have demonstrated an ability to bring value to shareholders, a large part of which is due to the very judicious deal-making skills of both our former and current management team when the underlying businesses were bought.

“As important, was the decision to take action two years ago when we realised that the increasingly testing market conditions Europe-wide and Fayrewood's market rating were not conducive to remaining as a quoted entity, particularly as investors were demonstrating a limited appetite to fund a long-term acquisition strategy. Accordingly the Board of Fayrewood unanimously recommends approving the disposal.”

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