Intechnology Share Discussion Threads

[affc21] 04/4/2006 06:52

Non the wiser now (disapointed no details)?

[pbracken] 03/4/2006 19:21

Well, the sale has been done - but no details supplied.

RNS Number:9063A

InTechnology PLC

03 April 2006

3 April 2006

InTechnology plc


Sale of continental European security distribution business


Further to the Company's announcement on 14th March 2006 the Board of InTechnology plc is pleased to announce the sale of its continental European security business to Magirus AG, a value-added distributor in Germany, with effect from 31st March 2006. The sale consideration includes repayment of the inter-company account.

Further details will be incorporated into a trading update on the financial year ended 31st March 2006, which will be issued in due course.

[affc21] 31/3/2006 16:51

Press info -Dated: 03 Apr 2006 ? :

IBM maps out a brave new PartnerWorld

Big Blue has decided it wants a piece of the lucrative SME market, and has launched a range of new initiatives that it hopes will crack the $500bn sector. Sara Driscoll reports from IBM's recent partner conference in the Mandalay Bay Hotel in Las Vegas

Sara Driscoll, CRN 03 Apr 2006

Innovation is the name of the game for resellers playing in the IBM space, as Big Blue tries to shake off its ultra-corporate image and en-courage its VARs to sell new solutions to the SME sector.

At its recent PartnerWorld event in Las Vegas, innovation was IBM's main theme. The firm launched a range of products and VAR incentive schemes based around the idea that innovation will drive its future business, both in terms of product sets and partner choice.

"Last year we started our 'without boundaries' theme. This year, under the same theme, we are adding innovation," Donn Atkins, general manager at IBM global business partners, told the 5,500 delegates. "It is key to our business and key to your business. Partners are prominently featured and key to IBM's innovation."

To entice partners to innovate, and to create and sell new products aimed at the SME sector, IBM launched several initiatives in Las Vegas. The most prominent scheme, revealed by CRN recently (CRN, 20 March), is the Express Advantage programme. The initiative will combine Express-branded products, services, software and financing bundles.

"The SME sector is now part of all talks currently taking place at IBM. It is the biggest market, worth $500bn, and it is growing faster than the rest of the IT market," said Steve Solazzo, general manager at IBM global small and medium business. He added that the Express Advantage programme has three prongs targeting the SME sector: Express-branded products, expanding the partner ecosystem and improving the customer experience.

Under the products aspect of the scheme, Big Blue launched two IT assessment consulting initiatives: IBM Express IT Strategy Assessment, which examines an organisation's entire IT system, and IBM Express Web Site Effectiveness Assessment, which is designed to help SMEs find out how effective their web site is and how they can improve it.

IT security was also a focus for the vendor, with the launch of the first ever Express Tivoli products: IBM Tivoli Identity Manager Express, IBM Express Managed Security Services for Web Security, and IBM Express Vulnerability Assessment.

Other Tivoli products launched by the vendor under the Advantage programme include: Tivoli Storage manager Express, Monitoring Express and Provisioning Manager Express.

"We are taking our enterprise products and making them simpler, because we realised that the mid-market does not want all of the functionality. So we will do all the pre-configuration for them," Solazzo told CRN. "Security will be a priority for us this year, which is why we launched the Tivoli products. We have the IBM brand in security, but there were no products that the mid-sized companies could buy."

Kevin Drew, managing director of VAR Triangle, said the new product sets and bundles are a good idea. "It is a rebranding and bundling of complex products, which is the right concept to undertake for IBM," he said.

"However, IBM has to create the necessary pull around this in the market. Express has a lowered price point, but this does not necessarily mean it will drive up volume. Demand has to be created out in the market."

Steve Pearce, chief operating officer at distributor InTechnology, agreed. "Express Advantage is clearly set around the SME sector and getting a higher run rate. It is early days at the moment from a distribution point of view, and a lot will depend on the marketing clout that IBM puts into this to drive demand," he said.

"It is good news for the channel that IBM is tailoring specific packages aimed at the small-business sector, Resellers will find it easier to sell. The main effect will be whether IBM's brand can translate down into the SME market, and whether there will be demand from end-users. The concept as a whole is the right one for IBM to take, and the Express Advantage programme should be good for the channel."

Under Express Advantage, IBM unveiled end-user tools, such as a web site and concierge service, which will connect end-users to the service they require. Also launched in Las Vegas were: a partner portal, where VARs can get access to technical support, sales and marketing campaigns, and improved partner dashboards that allow partners to navigate sales assets from one location.

Solazzo said this would help partners to communicate and form their own partnerships and ecosystems, all under the firm's ValueNet scheme. "In this world you cannot just be a market maker, you have top be a match maker too," he said.

[affc21] 28/3/2006 21:30

Some healthy buys today and up 18% today,with perhaps more to follow over the next few weeks.

Punters (and or people in the know?) buying in ahead of the next news release (It is expected that this arrangement will result in a completed disposal during April 2006 and the Board expects to make a further announcement at that stage).

[pbracken] 28/3/2006 09:32

I promise I won't start a running commentary on ITO, but it IS worth pointing out that for the first time in a while, the mms are very short of stock. That partly accounts for the 20K trade at way, way above the quoted offer level.

ITO has almost certainly turned the corner...

[pbracken] 28/3/2006 07:20

A veritable flurry of posts; something must be happening...

I'm not sure, she-ra, if you're making a point (if so, what is it?) or merely stating a fact. Perhaps both. But if your point is that because ITO has not made a profit during the last five years, it never will, or it disqualifies ITO from consideration as a serious investment opportunity, or it means the company is going bust, then say so - and invest your pennies elsewhere.

Don't simply slur - "they [ITO] are on life support and all this fairytale dreaming of 50p a share is ridiculous". Anyone can do that.

[Abuse team] 27/3/2006 19:22

Post removed by ADVFN

[affc21] 27/3/2006 19:19

Hopefully for ITO that will be in the past,all being they get a fair price for the possible disposel of it's continental European security business to Magirus AG,for which ITO had previosly received a number of unsolicited approaches for its European security business (hopefully a price advantage to ITO).

Then its up to management to finaly get ITO into a profitable growing business,all being the above sale is pulled off (again at a fair price).

Not a done deal as yet,but certainly looking brighter.

[she-ra] 27/3/2006 18:50

This company hasnt made a profit in the last five years.

[thailand43] 27/3/2006 17:10

This share now has a cast iron floor underneath it. It's been sold to near death for 4 years.

The recent and potentially mortally bad trading news has been absorbed and reorganisation effected.

The company had multiple potential purchasers for it's European business and would only have entered into exclusive terms on some agreed minimum purchase price basis (otherwise why go to exclusive negotiations?).

So barring some unlikely fallout during final negotiations we will have a healthy balance sheet, profitable and growing core managed services division with attractive new services coming through it as a channel leader.

One of the few solid high return-potential tech stock buy opportunities at current market price levels imho.

[pbracken] 27/3/2006 08:59

You make a fair point about the sale price of the european business, she-ra. But it is a good business, and better management of it will pay handsomely. Because of its potential, I don't think ITO will give it away. Also, the price I calculated is nowhere near twice the current price of the group company - that would be daft.

Your comments on the debt and your description of the company as being on life support are much less valid. Net debt stands at around £25m and the interest payments are easily seviceable from operating profit.

The 50p share price target is achievable in the short term.

As regards Spring, I have only recently taken up a small trading position; like ITO, it could prove to be a lucrative recovery play.

Edit: as for your remark about reality - the market priced these at 350p a share a few years back, when they were less than half the size and when their managed services operation was much smaller still. So, the market can get it wrong, she-ra - it can place too high a price on a stock, and - as is the case today - too low a price. I suggest you fill your boots whilst you can...

[she-ra] 26/3/2006 16:02

pbracken - You do really follow some dogs.ITO hasnt made a profit in the last 5 years just like Spring which has only made a profit once in the last 5 years.

There is a lot of debt and the bidder will know they are on life support and all this fairytale dreaming of 50p a share is ridiculous. Whose ever heard of a company selling a non core business that is a third of total group revenues for nearly twice the share price of the group company.

Stop dreaming,get a grip on reality.

[pbracken] 24/3/2006 12:13

How do you calculate your share price estimates?

[technonotice] 23/3/2006 16:08

Well the we would be looking at roughly 60-65 a share.

Lets play it safe and they sell for enough to wipe debt then that would equate to at a guessestimate 55p

Good enough ;)

[pbracken] 22/3/2006 10:39

I doubt if they will sell it for less than .6 x enterprise value, around £42m. It'll wipe out the debt, and add £17m to the balance sheet. It could go for more - the division has an attractive operational gearing and on t/o around £70m should be able to generate £3.5m pre-tax with some careful management.

Anyway, the sale will make a mockery of ITO's current valuation, especially as we can expect good things from managed services.

[technonotice] 22/3/2006 09:06

What did they get for the sale, was it enough to make a dent on their debt.

Anyone care to speculate.

[pbracken] 15/3/2006 16:43

thailand - I enquired about those large transactions (clearly linked) and I am none the wiser for it.

Regarding managed services, I am basing my comments on the increasingly bullish remarks from ITO itself: "The Managed Data Services division continues to trade in line with management's expectations and is expected to achieve increased operating profits before interest, tax and amortisation in the second half-year." (that's taken from the November announcement).

From what I can gather, this performance has continued and the division will report record revenues and earnings at the FY.

[thailand43] 15/3/2006 14:01

PB- I hope so.

Why do you feel that the managed services sales are motoring?

So what about all these 1/ .5m ordinary share trades going through at the mid-price of 30p? I never understand how this works if they are ordinary and not some bargain/ other trade sale...

[pbracken] 15/3/2006 11:21

thailand - I don't think that ITO is 'stalling' on managed services; my feeling is that this element is firing on all cylinders (to run with your motoring analogy!).

But I acknowledge your caution. And the company's PR IS poor. Also, Wilkinson needs to find a home for some of his 50% holding, which presently exagerates the trends in any trading pattern.

I think ITO has turned the proverbial corner. It's clear from the trade press that it is focusing on higher margin business (perhaps at the expense of revenue) and I'm hopeful that this effort will show in improved profits forecasts at the time of the Full Year results.

[thailand43] 15/3/2006 09:33

PB

I added most recently late at around 38 and can't justify buying more on balance with my portfolio.

I'm tentative because of the seeming paralysis of the company's communications efforts and the total lack of volume market interest in ITO. 'Muted response' is something of an understatement!

Until they offer a convincing update on performance and confirm strategy going forward we might have to start wondering whether having found the security/ storage distribution business unworkable, and that they are also stalling badly on their core managed storage services sales.

For sure there is value here but ITO has fallen off the map. I'm waiting patiently...

[pbracken] 15/3/2006 07:00

It seems likely that the speculation has forced this holding statement - confirming the rumour but witholding the details of it until the deal is signed.

The lack of detail is the cause for the muted market reaction, because in my view this development is wholly positive for ITO. The European operations, though growing well, were acting as a constraint on working capital (such is the size of the debtor days) and deflecting management time from developing the higher margin business ITO calls Managed Services (itself worth the current share price).

Am I the only one tempted to acquire more?!

[affc21] 14/3/2006 16:08

InTechnology in exclusive agreement to sell continental European security ops
AFX


LONDON (AFX) - InTechnology PLC said it entered into an exclusive arrangement to sell its continental European security business to Magirus AG, a value added IT distributor based in Germany.

The decision follows several months of negotiation, during which InTechnology received a number of unsolicited approaches for its European security business.

The sale is expected to include all of InTechnology's operations in France, the Netherlands, Germany, Switzerland, Spain and Italy and will have no impact on any of its UK business.

The disposal is expected to be completed in April 2006.

[e-mail]

[thailand43] 14/3/2006 11:13

More fom Microscope on the same topic:
Monday 6 March 2006

Italians are suitors for European business of InTechnology

The second suitor for InTech-nology's continental European business is Italian specialist security distributor ITway, according to channel sources.

As revealed by this magazine last month the business has two suitors in the form of German distribution outfit Magirus as well as another which is now thought to be Italy-based ITway.

The two firms are believed to have made bids for the security distribution business which was first muted as being on the market late last year.

One source claimed the business would suit both bidders in different ways. "ITway is a specialist security distributor that wants to widen its European coverage whereas Magirus is a broadliner that wants to sell higher margin products."

InTechnology and ITway were unavailable for comment when going to press.

Dave Ellis, director of e-security at security distributor Unipalm, said it would not surprise him if either firm bought the Allasso business. "ITway is in similar markets to Allasso and Magirus has dabbled in security in the past," Ellis added.

[pbracken] 13/3/2006 15:52

Here is the speculation to which I alluded above:


Buyers eye InTechnology's continental business

Distributor InTechnology is receiving interest for its continental European operations, with two well-known distributors said to be in pursuit.

As revealed by this magazine last year, channel talk was rife that the company had received interest for the business it acquired from Articon Integralis in 2003. Any deal is said not to include the UK distribution businesses, according to sources close to the distributor.

MicroScope broke the news in October that InTechnology had suitors for that part of the business, but the reports are said to have circulated following an attempted management buyout in continental Europe.

"There are a couple of pan-European companies pursuing InTechnology's continental European businesses and I expect something to happen in the near future," said a source.

The source added that this would be in line with changing business practices and consolidation in the European distribution segment.

"Many big distributors are looking at their vendor portfolios and asking where they can make money and security is an area they can do this," he said.

Gerrard Kerrigan, channel head at InTechnology vendor partner IronPort Systems, said the distributor's European business would be attractive to potential buyers on two fronts. "It would give a buyer a European footprint and the opportunity to sell higher margin products," he claimed.

InTechnology's continental business includes operations in France, Germany and the Netherlands with total revenues of E86m (£58.8m).

InTechnology was unable to comment.

[pbracken] 06/3/2006 09:00

empire - I think something is afoot, though I know not what! The fact that ITO did not update the mkt in January as it normally does suggests that trading is in-line. Also, it may be that it has decided to update the market on trading at the same time as it announces some developments in its overseas business (I allude here to the speculation that ITO is looking to restructure -perhaps sell - its European operation).

So, something is due and I just hope that, after years of disappointment, it's positive.