Esprinet has acquired the sixth largest distributor in Spain as it continues to consolidate the southern European market through M&A.
Italy-based Esprinet will acquire 100 per cent of the capital in GTI Group for €38.8m in a cash transaction.
GTI Group is a value-added cloud software distributor which logged revenues of €179.9m for the 12 months ending 30 September 2019.
A Veritas, Microsoft and VMware partner, Madrid-based GTI is the number-one distributor of value-added reseller and systems integrator cloud software and solutions in the Spanish market, and the sixth largest in the country by revenue, according to Esprinet.
In Channel Partner Insight's rankings of Spain's top 25 distributors by revenue, GTI also emerged as the sixth largest, behind the likes of Tech Data, Ingram Micro, Arrow ECS, Esprinet and MCR.
GTI boasts a workforce of more than 170 employees, serving around 5,500 customers across its home country as well as Portugal and North Africa.
Esprinet claims that, since 2017, GTI Group has been gradually shifting its business towards selling software to the reseller channel in a move away from its roots as a hardware distributor in the retail sector.
In the six months ending 31 March 2020, hardware sales accounted for only 30 per cent of GTI's revenues, claims Esprinet.
For GTI's full-year ending September 2019, sales of SaaS and cloud solutions came to €62.4m, up 34 per cent on the previous year, while on-premise software sales grew by 29 per cent to €52.9m.
Esprinet claims that acquiring GTI is in line with its strategy to consolidate its leadership position in southern Europe, while becoming a key player in as-a-service business segments.
In a statement, CEO Alessandro Cattani said the deal puts Esprinet as the second largest player in advanced solutions in Italy and Spain, with pro-forma revenues of around €750m.
Esprinet's total revenues came to €3.95bn in full-year 2019, an increase of 10 per cent on the previous year.
"The transaction has a formidable strategic value: it strengthens us in a segment with high profitability, allows for a major leap in quality in the software segment in Spain and is a milestone in our development path towards the sale of multi-cloud solutions," he said.
"With the entry into the Group of the highly specialised GTI team, we enrich our expertise in the management of as-a-service distribution platforms by integrating replicable best-practices in relation to our current customers in Spain and Italy."
The acquisition marks the latest in a series of acquisitions for Esprinet in the Spanish market.
It became the largest distributor in Spain in May 2016 after acquiring the country's fourth largest distributor Vinzeo Technologies.
Its Spanish operations were then bolstered further just months later through a deal with Itway Group for its value-added Italian, Spanish and Portuguese arms.
It became clear that another big acquisition could be on the horizon for Esprinet, after the distributor secured €152.5m in a three-year credit facility in October last year to "support future business prospects".
In an interview with Channel Partner Insight in 2018, Cattani played down any notion that Esprinet will make a big acquisition in the near future, claiming that it will likely take a more conservative approach to M&A after its 2016 acquisition spree.
He did say, however, that Esprient could make some smaller acquisitions for high-margin businesses in the datacentre or accessories space.
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