Aptec and Despec unite under DIFC umbrella

Management looking for back office synergies from Aptec and Despec

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By  Andrew Seymour Published  October 27, 2008

Regional IT distributors Aptec and Despec are exploring ways to combine their back-office functions now that both companies are majority-owned by DIFC Investments LLC, the investment arm of Dubai International Financial Centre.

DIFC Investments became the majority shareholder in Aptec Holdings during the middle of last year. In December it then purchased a 70% stake in Despec Group International — which encompasses its Benelux, Turkish and Middle East subsidiaries — although it is not clear how much DIFC paid for its stake in either distributor.

However, the two-year old investment company appears eager to maximise the pair’s regional resources where it makes sense and is understood to be keen on “building” a technology group with strong market coverage.

Aptec continues to ramp up its focus on the value add and enterprise side of the business, while Despec remains more of a consumer and printing supplies specialist.

Ali Baghdadi, CEO and president at Aptec, admits the companies are looking for ways to exploit their common ownership, starting with the sharing of key back-office functions.

“At the moment we are mainly looking at how to integrate back-office functions,” he revealed. “We have got some very aggressive plans in terms of our own logistics operations, which include combining Aptec and Despec logistics into one hub that can not only service both companies, but others. Despec also shares our office in Saudi Arabia right now too.”

Having hosted Despec in Saudi Arabia for the past month, Aptec is looking to do the same in other countries where it has operations, such as Lebanon, Kuwait and the UK. Both distributors also have offices in Turkey.

Despite the efforts to take advantage of back-office efficiencies and become seen as a wider IT distribution group, Baghdadi insists there are no plans to rebrand either entity.

“I think it is always good to keep a personality,” he said. “Aptec is not known to be a supplies company. Despec has a good brand awareness as a supplies distributor and we must capitalise on that. You will see Aptec more as the name for SMB and value, and Despec for supplies.”

Baghdadi, who remains the other shareholder in Aptec Holdings alongside DIFC, says the company’s strategy to shift its portfolio towards the direction of the enterprise channel is already paying dividends. Over recent months the distributor has replaced existing HP volume lines with high-end server and storage hardware, and added software vendors such as VMware and NetApp.

“We have also signed with Dell as a value distributor, and we’ve got Sun and IBM, so we really have the best portfolio for value, servers and enterprise computing in the market,” said Baghdadi. “What does this mean? In spite of that, our revenues have gone up this year by 40% and our margin has gone up by 80%.”

Meanwhile, Baghdadi also confirmed that Guy Whitcroft has left his position as chief operating officer after completing a one-year contract. He is now working with Aptec on a project basis and is currently carrying out an assignment relating to acquisition targets.

Baghdadi confirmed there were no plans to fill the COO role. Instead, regional CFO and ex-Tech Data deputy managing director Jairaj Walder will be responsible for some of the operational duties, while Mario Veljovic is reporting directly to senior management as head of operations and logistics.

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