Thursday 21st June 2012
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Renaissance Corp, which used to have a monopoly on national distribution of Apple products, will sell its IT distribution division to Exeed Limited, halving the size of its balance sheet.
IT distributor Exeed will take over the distribution of Apple, Fuji, Cygnet, Belkin and Ozaki and acquire all the company's stock, valued at about $2.5 million. Exceed will pay $2.3 million in goodwill and about $570,000 for fixed assets. A shareholder meeting will be held on July 6 to approve the deal.
"The time had come to get bigger in the industry or get out," Shaun Rendell, chief executive at Renaissance said in a statement. "We admire the Exeed team and we are pleased, with Apple's blessing and subject to shareholder approval, to hand the brand on to them."
Under the agreement the Christchurch-based company will exit the distribution business. It will be broken into two parts, a specialist Apple retailer, Yoobee and a specialist education institution, Yoobee Design College formerly known as Natcoll.
The sale means sales more than halve to $80 million from $180 million, based on the company’s budget for 2012. Net interest bearing debt is wiped out.
“The shape of the company changes dramatically. The balance sheet is halved,” chairman Colin Giffney said in the statement. “The operating risk around the distribution business is eliminated. The remaining businesses are much less volatile. Neither of the businesses is working-capital hungry.”
In April, Renaissance declared a $239,000 profit before tax and a $1.9 million post-tax operating surplus, in the six months ended March 31. That followed a receipt of $2.5 million in insurance payments.
The company was hit by two major blows in 2010 and 2011 – the introduction of a second licensed Apple products reseller and the Christchurch earthquakes.
Shares in Renaissance have gained 5 percent this year and last traded at 10 cents.
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