ScanSource, an international distributor of specialty technology products, is to acquire Imago Group, a distributor of video and voice communications equipment and services. The letter of intent is non-binding and the proposed acquisition is subject to the negotiation and execution of a definitive purchase agreement. In addition, the proposed acquisition would be subject to regulatory approvals and is expected to close in the quarter ending on 30 September 2014. ScanSource will be acquiring Imago’s operations in the UK and France, and their recently acquired business in Germany.
Imago sales for fiscal year ended 31 July 2014 are estimated to be GBP 50 million with operating margins consistent with ScanSource’s Communications business. The all-cash transaction includes an initial purchase price of about GBP 24.5 million, plus earnout payments over the next two years. The acquisition as contemplated in the letter of intent is expected to be accretive to earnings per share and ROIC in the first year after closing, excluding one-time acquisition costs.
Founded in 1991 and headquartered in the UK, Imago has nearly 120 employees in the UK, France, and Germany. In June 2014, Imago acquired Vitec Distribution, a videoconferencing distributor in Germany. Imago provides a full suite of services in video, voice and data, including project initiation, implementation and training, as well as a strategy in assisting resellers with implementing cloud solutions via public, private or hybrid means. Imago carries a strong line of vendor partners, including Polycom, Barco, Samsung, and NEC. In 2013, Imago was named by Polycom as its Distributor of the Year in EMEA.
“The proposed acquisition of Imago represents the next step in ScanSource’s strategy to be the leading value-added distributor of video, voice and data solutions for resellers in Europe,’ says Mike Baur CEO ScanSource. Ian Vickerage, Imago founder and managing director, has grown the business into a respected distributor of video and voice solutions in Europe. He has agreed in the letter of intent to remain as managing director of the company and will continue to lead the talented management team he has built at Imago.
“I am incredibly excited about joining the ScanSource team,’ says Vickerage. “Our resellers will have access to an expanded portfolio of solutions from ScanSource and Imago, while our vendors will benefit from the enhanced channel opportunities available to them.’
It is expected that Imago would operate as a separate business unit as part of the ScanSource video, voice and data strategy in Europe. Vickerage will report to Mike Ferney, president of Worldwide Communications and Services, ScanSource. Ferney is responsible for the company’s two communications business units located throughout Belgium, France, Germany, and the UK. After completing the Imago acquisition, ScanSource will have nearly 400 employees located in more than 15 offices throughout Europe in its Communications and POS and Barcode business units.
