Dicker Data engages in the distribution of technology hardware, software, and cloud distributor with over 42 years of experience. Its product portfolio comprises technology vendors, including HP, Cisco, Toshiba, ASUS, Lenovo, Microsoft, and other tier 1 global brands. DDR shares have been performing exceptionally well in the past year. The DDR share price is up 78% on a 1-year basis and 29% in 2021 alone. The company has been reporting good numbers and is able to grow its business, while keeping profitability at a very healthy rate. What’s more? At today’s DDR share price, DDR also has a dividend yield of 2.97% – again a very healthy number for a company that is still growing.
Why is Dicker Data Shared Price surging on ASX today?
This morning, DDR shares are one of the top performers on the ASX as the DDR share price has surged more than 17% at the time of writing this piece. DDR announced this morning that the Company has entered into a binding Sale and Purchase Agreement (SPA) to acquire the Exeed Group business operating across Australia and New Zealand. This transaction will propel Dicker Data NZ to become the second largest IT distributor in New Zealand with estimated revenue of over NZD $500m for the combined entities.
Established in 2002, and headquartered in Auckland, Exeed is the second largest IT distributor in the New Zealand market and holds dominant market share across a number of the vendors they represent. The acquisition of Exeed will provide Dicker Data NZ with the platform to rival the largest distributor in the NZ market using a mixture of unique local market knowledge and access to an increased range of world leading brands.
With operations expanded into Australia in 2016, the Exeed business represents combined revenues of approx. NZD $380m, with FY21 full year normalised EBITDA earnings expected to be approx. $15m. In addition to NZD $310m of revenue in the NZ market, this acquisition also gives us access to NZD $70m revenue in Australia, across a vendor base that has no overlap with existing Australian vendors.
Chairman and CEO, David Dicker, Dicker Data Limited said “After many attempts, over more years than I can count, we have finally got a deal done to acquire Exeed. This transaction will put us a very strong number 2 in NZ, with a platform for number 1. The combined companies are highly synergistic. The deal done will be all cash. A very satisfying outcome.”
DDR shares currently trade at $13.6 a share with trading still open for the day.
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