Support services group DDC announced the acquisition of the server product distributor Hammer Consolidated Holdings for $46.76 million in an all-cash deal, which could be completed by the end of this year. The deal will also integrate with the company´s DCC Technology division, which trades as Exertis.
This is a good development for the Dublin-based company, considering the fact that Hammer distributes server and storage products for a numerous range of suppliers, including NetApp, Western Digital, Intel, Seagate and Dell. Also, the data storage company sells to resellers, cloud service providers and system integrators from sales offices in Sweden, Netherlands, Belgium, France, Germany and the U.K., according to the Telegraph.
DDC´s Payment Method
"The acquisition of Hammer will significantly strengthen the product and service capability offered by Exertis to its reseller customers. In addition, Hammer's expertise will better enable us to take advantage of positive industry trends, including growth in cloud data centers and demand for big data analytic," DDC CEO Tommy Breen told the International Business Times.
The payment method involves an initial payment when the deal is closed, followed by further payments which will be made over three years depending on Hammer´s future trading results. Although this is not precisely the most reliable way of paying, both companies have good relations and DDC is guaranteed the refund in cash.
Hammer Knows DDC Can Pay
Also, Hammer knows that the Dublin-based company could pay the whole cost, considering that they effectively bought French gas company Butagaz from Shell for $509 million, and its operating profit rose $400 million for the year ending March 31, from $243 million during the previous year, as reported by the Telegraph.
The only issue about this deal is that depends on the European Commission decision, since its subject to competition regarding clearance. However, it has been announced that the DDC-Hammer deal would have no problem, and it will be good to go by the end of December.