The distribution arm of Cheshire wholesaler CCM Distribution is being sold to its management as part of the main group's expansion into emerging markets.
Computer Component Marketing (CCM) will be sold to a team led by Brent Cutler, managing director of CCM, for an undisclosed sum, subject to shareholder approval.
The remaining listed firm will be called Fundamental-e Investments and, under the leadership of company founders Peter Kitson and Stuart Willmott, will invest in the telecom, Internet and media sectors. It will retain a minority investment in CCM.
Fundamental-e Investments has already taken a 34 per cent stake in WAP Integrators, a company dedicated to building WAP-enabled Web sites in areas such as gambling and sports. If the management buy-out (MBO) is approved, the firm said it will have £6m, which it is negotiating to invest in other companies.
Cutler told Computer Reseller News that the main group's expansion into emerging markets was not compatible with the direction of the distribution business. We have an established business, we know what we are doing and our customers love us. The best thing for us to do was to detach (from the main business)," he said.
Cutler said CCM, a non-franchised components and peripherals distributor since 1992, would expand in two key areas: its Freedom branded range of upgrade components and building a product-ordering Web site.
Turnover at CCM Distribution for the year to September 1999 was £22.9m.
Profit fell from £1.4m in 1998 to £919,000, a result of the impact of the millennium bug and expenditure on the company's future expansion.
Cutler said the MBO is set to be completed in four to six weeks.
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