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eSys considers DIFX listing

Vikas Goel, chairman and managing director at IT distribution and PC assembly outfit eSys, has confirmed there is a ‘high probability’ the company will list part of its global operations on the Dubai International Financial Exchange (DIFX) in late 2006 or early 2007.

Vikas Goel, chairman and managing director at IT distribution and PC assembly outfit eSys, has confirmed there is a ‘high probability’ the company will list part of its global operations on the Dubai International Financial Exchange (DIFX) in late 2006 or early 2007.

“Dubai is one of the financial markets that we are looking closely at,” explained Goel. “eSys’ operations in the Middle East are performing very well and we are looking at a timeframe focused on the second half of 2006 and the first half of 2007.”

“We have been looking at other stock exchanges as well but Dubai is a prominent contender. What we may look to do is float the operations that we have in the Middle East and Africa coupled together with the European operations that we have in the UK and Netherlands.”

eSys posted Middle East and Africa (MEA) sales of US$143m in full year 2005 — an increase of 46% on 2004. The company is targeting MEA sales of US$180m in 2006. In addition to its distribution business, eSys has also built up a powerful contract assembly operation in the Middle East, which is already supplying PCs to major retailers and online stores in the UK. Goel reckons that the company’s activity mix will be reflected in its valuation.

“We have met with representatives from DIFX and were very impressed by what we heard. The Middle East operation coupled with parts of the European set-up could realise a market capitalisation of around US$300m,” said Goel.

“The distribution business should be valued in line with the global norm for this type of operation,” he added. “However, the assembly business, which is performing very well, should be valued using a different set of criteria — just look at Dell’s valuation.”

With its established Middle East operations, commitment to Dubai, growth potential and its track record of profitability, Goel is confident that investors in the region would respond well to the opportunity to purchase shares in eSys’ regional operations. Funds raised through an IPO would be used to develop new business areas for eSys and also provide a warchest for possible acquisitions.

“I can say that there is now a high probability that we will list the operation on DIFX,” concluded Goel. “We are looking at growing the Middle East business and boosting sales of branded eSys products into Europe.”

Pavan Gupta, general manager at eSys MEA was recently promoted to the role of director Europe, Middle East and Africa at the company. Gupta will relocate to Amsterdam for his new role from where he will manage the company’s 12 offices across Europe in addition to his existing MEA responsibilities.

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