Yesterday, Cancom unexpectedly announced that its CEO, Thomas Volk, had handed in his resignation letter to the supervisory board.
In an unusually brief and vague announcement that lacked detail, Cancom simply announced that Volk had left due to "differing opinions" on the company's future.
Volk was on a five-year contract with Cancom, so he leaves the company three and a half years early.
Taking the reins of the fast-growing and ambitious reseller in October 2018 proved a largely thankless task for Volk.
He took on a role that most would dread, as he stepped into the shoes of Klaus Weinmann - a hugely successful and esteemed entrepreneur who built Cancom from the ground up over his 26 years with the reseller. He founded Cancom in the 1990s and built the reseller into a €1.38bn business.
Despite having big shoes to fill, there's no doubt that Volk was the right man for the job. He was previously Cancom's president and a member of its management board for more than a year before he took the CEO seat, he's chaired the boards of several companies, and his CV includes top positions with Cancom's main vendors including Dell and HP.
And it looks like Volk took on the CEO role with aplomb. Cancom's share price almost doubled throughout 2019 under his leadership, and revenues jumped by an impressive 22 per cent for the first nine months of the year to a commanding €1.18bn.
Volk has been pushing Cancom to become more global. He spearheaded two major expansion plays at the reseller, orchestrating one of the largest channel acquisitions of the year when he acquired UK-based MSP Novosco for €80m. He also took Cancom into its eighth geography through a greenfield expansion into Slovakia.
Furthermore, under Volk, Cancom grew its annual recurring revenues by 25.3 per cent over the first nine months of 2019 to an impressive €156.6m, while its Cloud Solutions unit as a whole, which bundles in managed services and its own software offering AHP, grew at a rate of 22.4 per cent. The unit now accounts for just under a fifth of Cancom's total revenues.
Judging by Cancom's share price growth, shareholders must be delighted by how Volk has eased into the CEO role. Furthermore, the reseller is embracing recurring revenues and services better than most.
With everything going so well, why did Volk step down?
Usually when a CEO leaves, they're forced out due to a poor financial performance, a lacklustre long-term strategy or a change of ownership. In Volk's case, none of these apply and Cancom made it clear that he resigned of his own volition.
It's also worth noting that several resellers have been struggling with retaining their CEOs of late. Infotheek, Proact, Getronics and Econocom are just a handful of major players where the top position has involved something of a revolving door.
It poses a problem. It's no coincidence that the best-performing and successful resellers in the industry have had long-standing CEOs. Look at Mike Norris at Computacenter, Ken Lamneck at Insight or Thomas Olemotz at Bechtle.
I don't have the answer, but there are circumstances surrounding Cancom which strongly suggest that the reseller's business is at a fork in the road.
The most obvious would be reports from Bloomberg in September that Cancom was weighing options to sell up after receiving numerous buyout approaches. In a conversation with CPI at the time, a Cancom representative rubbished the claim, suggesting that these rumours have emerged time and time again and never amounted to anything.
But the timing of Volk's departure following the sale rumours is curious. Could it be that Volk was in disagreement with Cancom's board about whether the reseller should sell?
Obviously this is just speculation on my part. But the reseller space is in the middle of a massive wave of consolidation, and it wouldn't be surprising for a large player - be it CDW, Bechtle or SHI - to make an acquisition for a large competitor with upwards of €1bn in revenues.
CDW has openly suggested it is looking for more M&A in Europe and we've already heard that another European heavyweight - Atea - is eyeing up a mammoth acquisition as it looks to step outside its Nordic and Baltic remit for the first time.
Cancom is at another fork in the road regarding its future identity. The firm now brands itself as an MSP, despite the fact that managed services are only a small percentage of its business.
It's "IT Solutions" segment, which comprises more traditional IT infrastructure, software, systems integration and related services, still accounts for the vast majority of revenues. Managed services continues to grow, but at an almost identical rate as Cancom's core business, so it's unlikely that managed services will account for a larger overall percentage of its sales mix any time soon.
So perhaps Volk's departure also has something to do with Cancom's future identity.
The firm has set itself a target of reaching double-digit EBITDA margins through investments in managed services and its proprietary AHP platform. Adjusted EBITDA margins reached nine per cent in the first nine months of the year, so the firm is almost there. Volk's push to globalise Cancom through M&A and greenfield expansions is also part of this aim to become a global MSP.
Is it possible that Volk left because he disagreed on how quickly Cancom makes this transition?
Whatever the answer is, Cancom is now in the hands of Rudolf Hotter. Like former long-standing chief Weinmann, Hotter is an entrepreneur, having founded a reseller himself in 1986. He's been a member of Cancom's executive board for 15 years, so there's no doubt that the business is in safe hands.
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