Most people didn’t see it coming. And many are waiting to see what happens next. But one thing is certain: the $54-million merger of EMJ Data Systems and Synnex Canada will have a definite impact on the distribution channel in Canada.
This could be the start of a trend, where small, niche distributors
team up with broadbase distributors, playing off each other’s strengths. But what does this merger mean for Canadian resellers?
EMJ Data Systems was known as a selective distributor with a personal touch and a high level of expertise — and a track record of consistently profitable quarters.
In 2001, Merisel was acquired by U.S.-based Synnex, becoming Synnex Canada — a broadbase distributor carrying about 60 different product lines.
Over the past few years, there’s been criticism from vendors and industry watchers that the information technology market is over-distributed. Mergers such as this one can help consolidate the distribution channel — meaning there are fewer players, but bigger, stronger ones.
EMJ Data Systems and Synnex Canada, for example, were distributing some of the same products from the same vendors — like Acer, Samsung and Microsoft. Now they can consolidate some of those offerings and perhaps grow other areas of the business.
In this case, the merger will bring EMJ’s expertise in barcode, point-of-sale and autoID technology to the U.S. market. In Canada, resellers will have the option of doing business with a niche distributor and a broadbase distributor, all at the same time.
We might see more of this down the road as broadbase distributors attempt to create more value-add for their reseller customers by focusing on specific markets or technologies.
Tech Data, for example, has built business units that focus on specific markets, such as security and enterprise storage. Another way of providing that value-add is by acquiring a niche distributor that already specializes in those areas.
EMJ Data Systems and Synnex Canada have different business models and different corporate cultures. Typically, when a large company takes over a smaller one, the smaller company is “”swallowed up”” — and often loses its original identity.
However, with EMJ’s Jim Estill at the helm as CEO of Synnex Canada, there’s a good chance the company will retain EMJ’s personal touch and build on its traditional strengths — such as Apple products and networking technology.
If Synnex Canada is able to merge the two businesses successfully, offering a range of low-cost products while maintaining EMJ’s traditional strengths, it could become a distributor that rivals the likes of giants Tech Data and Ingram Micro.