In a multimillion-rand deal, broad-based ICT distributor Pinnacle Micro has purchased the South African operations of Tri Continental Distribution, one of IBM and Lenovo`s biggest distributors in the region.
The announcement - which gives Pinnacle Micro access to IBM and Lenovo`s products - cements the company`s role as one of the preferred distributors to tier one ICT companies in South Africa.
Arnold Fourie, CEO of Pinnacle Micro, said the subsequent distribution deal with Lenovo/IBM - which is effective from 1 December - is a "major distribution announcement for Pinnacle Micro, definitely one of the most important in the past few years".
Lenovo Group, the leading personal computer brand in China and across Asia, acquired IBM`s Personal Computing Division in December 2004.
"Following our purchase of Tri Continental, we now have access to the full Lenovo/IBM product range for distribution in South Africa. This announcement really cements our role in the ICT industry as one of the top broad-based distributors. We now have access to a wider product range - including the laptops from Lenovo/IBM - which is going to augment our existing range of products."
Fourie was reluctant to talk about volumes, although he believes the agreement is expected to significantly extend Pinnacle Micro`s position in the local notebook market.
Gary Demenzes, at Lenovo, said Pinnacle Micro was selected due its "pedigree as a broad-based ICT distributor.
"Pinnacle Micro supplies all the major tier one ICT companies. It has deep experience as a distributor in southern Africa and has an extended geographical reach in the country, including in Botswana and Namibia."
He added that besides Pinnacle Micro`s geographical reach and penetration the company was also established in the corporate, government, and retail markets - as well in the channel. It currently boasted more than 5 600 active dealers.
The value of Lenovo Group Limited`s purchase of IBM`s Personal Computing Division was valued at US$1.75 billion in 2004. As part of the deal, IBM became Lenovo`s second largest shareholder, with an 18.9% equity stake. Lenovo produces desktops, laptops, servers, handheld computers, imaging equipment and mobile phone handsets. It also provides information technology integration and support services, as well as offering contract manufacturing. Its executive headquarters are located in Beijing, China, and in Morrisville, North Carolina, USA. It is incorporated in Hong Kong.
As of 31 May 2007, 39,6% of Lenovo is owned by public shareholders, 42,4% by Legend Holdings Limited, 7.9% by IBM and 10.1% by Texas Pacific Group, General Atlantic LLC and Newbridge Capital LLC. Due to the fact that the Chinese Academy of Services - a Chinese government agency - owns 65% of Legend Holdings, the Chinese government effectively owns 27.5% of Lenovo and is the largest shareholder.
Pinnacle Micro distributes on behalf of more than 37 companies, including brand names such as Logitech, Apacer, Western Digital, Canon, LG Electronics and Mio Technology.
Pinnacle Micro`s parent company, JSE-listed Pinnacle Technology Holdings (PTH), notched up a turnover of R1.72 billion for the year ended June 2007. Pinnacle Micro, the main engine of the group, contributed more than R1 billion to this revenue.
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