Bell Micro To Acquire Rival German Distributor

Enterprise distributor Bell Microproducts announced Tuesday that it has signed a letter of intent to acquire rival MCE, a European IT distributor headquartered in Munich.

Don Bell, president, CEO and chairman of Bell Micro, made the announcement during a presentation at Raymond James' annual IT Supply Chain Conference in New York city. The privately held MCE boasts annual sales of approximately $300 million, as well as a strong business around IBM's and Hitachi's enterprise technologies. Bell said the acquisition is part of Bell Micro's aggressive plan of action to restore growth and financial health to its European business.

"We've got a cost-reduction plan in place, as well as a plan to increase revenue and gross profit," Bell told conference attendees.

Bell Micro's European business slumped in the third quarter, suffering from the macro-economic decline in the region, as well as more price-sensitive competition in the enterprise-technology space. Jim Illson, executive vice president of finance and CFO at Bell Micro, said the addition of MCE will help the distributor improve business in some of the weaker regions for Bell Micro.

"Germany, along with Sweden, was one of our smallest market presences on the continent," Illson said. "Strategically, we think this is a very good move from a revenue and profitability point of view."