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Logicom to acquire Romanian IT distributor Gemini

Logicom Information Technology, a subsidiary of Logicom Public Limited signed a pre-sale purchase agreement for the acquisition of Romanian IT distribution company Gemini.

2017-08-09 20:12:19

GSP, in operation since 1992, is a distributor of Hewlett Packard Inc, Hewlett Packard Enterprises, and DELL EMC. Sales from its three major vendors amounted to RON 70 million (15.2 million Euro) in 2016 and RON 68 million (14.8 million Euro) in 2015. The PSPA specifies that once the purchase is completed, all distribution agreements, company employees, and products that have been in stock for less than six months will be transferred to the ownership of LIT.

The transaction does not involve the acquisition of shares. The acquisition will be completed once Gemini SP receives the required approval for the transaction by the company's financiers and the Romanian Competition Council, and when the company's vendors all sign cooperation agreements with LIT.

On the date of completion, LIT will pay GSP the amount of € 500,000 as well as the value of inventory items that have been in stock for less than six months. This is estimated to amount to approximately € 3,000,000. A further € 100,000 will be paid by LIT to GSP at the end of 5 years after the date of purchase, subject to any claims that may arise on the basis of GSP's obligations and representations, and their related warranties.

Taking into account the deferral in the payment of 100,000 Euro, an amount of approximately 500,000 Eurowill be entered in LIT's balance sheet as goodwill.

The decision for the acquisition was taken following an evaluation by the Group's competent internal department. No advice from external experts has been requested.

The acquisition does not affect the interests of the issuer's Secretary or the "designated person" within the meaning attributed to this term in Article 137(3) of Law 14(I)/1993 as amended.
The transaction is carried out on an arm's length basis.

With this acquisition, LIT will greatly strengthen its offering with products from the aforesaid vendors and thus expand its customer base. This is also expected to have a positive impact on LIT's sales and profitability, and is set to double the company's total sales for 2017, which amounted to RON 81.5 million (€ 17.9 million) in 2016. Due to LIT's proportionately small turnover no significant variation in Logicom's consolidated results is expected.


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