Sharechat Logo

Renaissance sells IT distribution unit to Exeed

Thursday 21st June 2012

Text too small?

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.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

UPDATE Renaissance to lay off up to 15 workers in store closures, sees gains in full-service retailing
Renaissance says 2013 earnings will be 'disappointing'
Renaissance posts first-half loss on shrinking margins from Apple products, impairment
Renaissance hires strategic adviser, cites low stock price
Renaissance takes legal action against Exeed
Renaissance's CEO Rendell accepts new position
Renaissance settles business sale, breaches banking covenant
Renaissance loss worse than forecast, flags possible capital raising
Renaissance shares surge on distribution unit approach
Renaissance still unprofitable on quakes, Apple competition