"We decided for the moment only to develop services in France, Belgium and Spain. Why? Because we learned that when we acquire many companies - in cybersecurity, in cloud, in hosting - these were little companies that were not scalable. Instead, we want to focus on the services activities where we can be leaders. For example, in France, Belgium and Spain we are leaders in the outsourcing of workplace management. This is something to develop. But we don't want to return to buying companies with some knowledge that we don't have and that will not be scalable."
Benguigui said Econocom has "almost sold everything that we wanted to sell" but said that an additional three or four businesses will be sold within the next year. The divestments have helped "clean the house" of the business, the group MD said, and enabled it to begin a new M&A strategy over the next few years without increasing its debt.
That M&A journey has already begun. Econocom acquired UK-based reseller Trams in July last year after its UK, Ireland and US managing director, Frances Weston, told CRN a few months before that it was looking to acquire a UK reseller with up to £150m in revenues.
Benguigui told CRN that Econocom is on the brink of closing an acquisition of a reseller with €18m revenue in Spain. He said this will soon be followed by the acquisitions of two "medium-sized" resellers in the Netherlands and Germany which he expects to close this June or July.
Econocom's TMF division meanwhile acquired French firm SOFI Group in April, which marks its first step into the refurbished mobile and tablet devices market.
Weston said that Econocom is continuing to scan the UK market for more reseller acquisitions, claiming that there are "tonnes" of companies up for sale in the market at the moment. "The fact of the matter is, some of these companies are too small, and they haven't yet gone into that growth and scale cycle. And that's not necessarily the entry point where we want to succeed," she said.
"For us, it's really finding seasoned management that's been in situ that know the industry, that's passionate about the industry, and that can really share that intel across the wider group. That's why with Trams it was very easy to do because they were instantly connected into our wider resources, instantly connected into Spain, France, Italy, delivering products to literally every single European country where we operate so far."
Benguigui added that Trams is the "ideal profile" of company that Econocom wants to acquire, claiming that potential targets need to already be of a decent size of between £50m and £150m revenue