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SCH buys Compel's desktop biz for £18.5m
Compelsource unit lost £4.3m in last half of 2000
Compel has finally sold its desktop business to Specialist Computer Holdings for up to £18.5 million cash.
The Birmingham computer dealer will pay £16.5 million for the loss-making Compelsource unit when the deal is completed - expected on March 22. The remaining £2 million cash will be paid over the next two years.
Compel has also agreed to pay £1.25m to an unnamed customer to release Compelsource from a contract.
Herts-based Compel said the sale would end a period of "significant uncertainty" for the company and its shareholders, "releasing funds for the development of the group's profitable businesses".
The deal cuts Compel's workforce from around 1,200 to 330. The remaining staff work within Compelsolve - its services business - and IT rental unit Hamilton Rentals.
The company blamed Y2K, falling margins and consolidation in the market on the decision to sell - it said it was concerned about the long-term prospects of "all but the largest operators in the desktop services sector".
Compelsource has made "substantial losses" in the last 18 months, and Compel said it did not expect the desktop unit to return to profit soon.
Compel will use £10 million of the buyout cash to pay off long term debts at the group, while the rest will be pumped into the remaining company.
Neville Davis, Compel CEO, said the company had no intention of selling off any more chunks of the group.
Compel also released its interim figures today. It saw operating losses of £1.9 million for the six months ended December 31 2000, compared to a £200,000 profit for the same period the previous year.
Figures included an operating loss of £4.3 million at Compelsource.
Sales for the group were £162.7 million, up from £135.7 million. ®