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CEO Frank Khulusi: With En Pointe Acquisition, PCM On Its Way To 'Hyper-Growth'
In a memo to employees, CEO Frank Khulusi said the company's acquisition of En Pointe Technologies will help drive a "new era" of growth for PCM.
In the deal, announced Monday morning, PCM, No. 27 on the CRN 2014 SP500 list, acquired all of En Pointe's assets, excluding inventory and accounts receivables, for $15 million cash as well as earn-out considerations. En Pointe is No. 42 on the CRN SP500 list and had $393 million in sales last year.
In the memo, which was viewed by CRN, Khulusi said the acquisition added key vendor partner capabilities, technical expertise, geographical reach and client base. However, most important, it will propel PCM to a period of "hyper-growth" as the company hits its 28th year in business, Khulusi said.
[Related: PCM To Acquire Assets Of En Pointe Technologies For $15 Million, Plus Earn-Outs]
"Whereas we're not where we want to be on all fronts, we have made great progress in positioning PCM for the future, in some ways well beyond some of our larger competitors," Khulusi said in the memo. "Many of our strategic initiatives have begun to grab hold, and we believe they will begin to meaningfully contribute to accelerated growth beginning in the second quarter, on our way to the hyper-growth we all desire."
Khulusi said he believes, with the trajectory the company is on and the added boost of the acquisition, PCM is only a "short distance" from a goal of $2 billion in revenue and landing on the Fortune 1000 list of largest companies, a goal he said the company could hit in 2015.
For the fiscal year 2014, reported on Feb. 12, PCM reported $1.3 billion in sales.
To hit that growth goal, Khulusi challenged employees to be more "aggressive" in their approach to the market, telling them to work together, focus on customers and "kick the competition out."
"Are you in the game? I know you are. You know I am!" Khulusi said.
"I will not only 'act with speed energy and enthusiasm in everything I do,' but I will be more aggressive than I ever have, without ever compromising our high ethical and moral standards."
Martin Wolf, founder and president of San Ramon, Calif.-based Martinwolf M&A Advisors, who advised En Pointe in the transaction, said the acquisition was a "smart acquisition" for all parties.
"I think it’s a very smart acquisition. Period," Wolf said. "We advised the seller, but I think it's very smart for the buyer if you look at what they're trying to change the business into. This accelerates the growth."
Full text of email from Khulusi to PCM employees, sent Monday morning:
In May we will we hit our 28th Anniversary. Thanks to your hard work and laser focus on our Mission and Core Values, as well as our staying true to our DNA of being nimble, hard-charging, and change drivers, we continue to make great progress towards getting our great company ready for the next 30. Whereas we’re not where we want to be on all fronts, we have made great progress in positioning PCM for the future, in some ways well beyond some of our larger competitors. Many of our strategic initiatives have begun to grab hold, and we believe they will begin to meaningfully contribute to accelerated growth beginning in the second quarter, on our way to the hyper-growth we all desire.
Today though I have one more thing to talk to all of you about. A very special announcement.
I’m proud to share with you the awesome news that we’re making our largest acquisition to date! We’re acquiring En Pointe, a $400 million a year leading IT solutions provider, as detailed below. This acquisition is very meaningful in a lot of ways, some but not all of which are also covered in the press release below. It all culminates, though, in one simple thing: We’re on our way to hyper-growth, and within a very short distance from $2 Billion a year in sales and becoming a Fortune 1000 company. How about we try to hit this in 2015? Wouldn’t this make you even more proud? Are you on board? I know you are. We’re family. We share our DNA!
Today marks a new era. Many of our vendor partners, competitors, stakeholders, and observers, already consider us as one of the more aggressive companies in our space in terms of pursuing our dreams, aspirations and goals. Starting today, I want you to become even more aggressive! Play to win. Work together. Don’t waste time. Focus on our customers. Wow them. Surprise and delight them. Kick the competition out. Don’t lose a single deal or opportunity. Next play. You’re not in sales? I’m talking to you just the same! Are you game? I know you are. You know I am!
I will not only ’act with speed energy and enthusiasm in everything I do’, but I will be more aggressive than I ever have, without ever compromising our high ethical and moral standards.
’Together, as one team, we can, and will, conquer the world.’