Bluechip Infotech has announced it has merged with fellow distributor DNA Connect to form what it called a new “powerhouse” distributor in Australia.
The merger combines Bluechip’s SMB focus with DNA’s background with enterprise businesses, while also expanding each other’s product offerings.
“The merger positions both companies to be stronger and accelerate the growth by providing more solutions to a wider combination of channel partners and segments,” Bluechip Infotech managing director Johnson Hsiung said.
“Both companies will continue to operate independently until at least the end of the year — in the short term the absolute focus will be on maintaining our current levels of accelerated growth but also leveraging each other’s segments and services – there will be no disruption to the already excellent levels of service we both already provide our partners and vendors.”
DNA Connect executive director Munsoor Khan said the synergies of the two companies were “considerable”, as both operated in different market segments and had minimum vendor and customer overlap. “The opportunity to massively accelerate growth is huge,” he said.
Khan cited some examples of potential synergy including DNA’s growing Operational Technology group and Bluechip’s national presence and warehousing.
Bluechip will also acquire DNA Connect’s Ingeniq, its partner services and training arm.
Hsuing said the merger had been in the works for two years now and continued into the COVID-19 pandemic and the lockdowns last year.
“IT distribution is dynamic and fast-paced – size matters as does the ability to embrace market change and opportunity,” Hsiung said.
“Both of us saw the opportunity presented to each other on how this would accelerate our growth. It really was an easy decision to make.”
Khan said both companies were looking to organically grow into each other’s markets, with Bluechip wanting to go into enterprise and DNA into the SMB market.
“When we originally met with Johnson and he explained his vision, the synergies made immediate sense as did the obvious accelerated growth opportunities for both of us,” Khan said. “COVID-19 put the brakes on our discussions but both companies did well despite this, recording record financial results.”
Hsiung said no redundancies would result from the merger and that the combined company would be looking to hire more staff.
“The staff of both companies now have more career growth opportunities than existed before we merged. Both of us have really good staff retention and work hard to create great company cultures,” he said.
On potential challenges facing the merger, Hsiung said there would be some along the way so both parties are patient with the process.
“Of course we will have challenges but this is not my first merger so I am aware of what could go wrong and therefore we are not rushing to combine, neither of us need to cost save and both of us run lean, efficient, profitable companies,” Hsiung said.
“We’ll focus first on easy wins for our vendors and partners and teams and evolve our systems and structures gradually and with the least amount of disruption.”
“I agree,” Khan said. “We’ve been talking now for over two years and we work well together. As a group we will have a very strong portfolio in analytics, productivity, UC and security and we will be in an excellent position to grow our business rapidly over the next few years.”