Bell Micro Shapes European Strategy

At the Raymond James 2005 IT Supply Chain Conference in New York Tuesday, Bell Microproducts CEO Don Bell said the company will acquire former "archcompetitor" MCE, a $300 million distributor of disk drives and IBMenterprise storage, server and software products based in Munich, Germany.

Bell did not disclose the terms of the deal, but he said it should be complete by the end of the year.

The move is an attempt to strengthen the European position for Bell Micro and combat declines from currency exchanges, supplier margin reductions and a weak market. Margins have fallen below 1 percent, and the storage reseller is undertaking a major restructuring of its European operations.

Bell also said Bell Micro will cease operations in Sweden and is restructuring its presence in the United Kingdom. "I'm still concerned about the UK, and that's the place where we have the heaviest market share and we have the most exposure," said Bell.

Latin America is also getting attention from Bell Micro, which has 11 facilities in Mexico and just opened one in Chile.

Meanwhile, operations in the United States are in good shape and up about 25 percent, said Bell.

"We set a goal internally. We've announced a '10 by 10' plan to hit $10 billion by 2010 and to do that we have to grow by 23 percent compounded by each year. We want 15 percent coming out of our existing operations and the rest through acquisitions. We have to take two or three times the growth rate in market share to get there," said Bell. "We have to make sure that we don't drive volume for volume's sake."