7/9/2010 10:37:00 AM
Consolidation in distribution
The mobile distribution sector has had a busy time of it already in July, with Go Mobile and JAG forming a joint venture and Peter Jones shuffling companies in his portfolio to create a more powerful brand in eXpansys.
Last month Daisy was on the war path with the purchase of Fone Logistics among others, and the company looks set to continue down the acquisition trail thanks to its £75m war chest.
All of which is yet further evidence of consolidation in distribution. Business remains tough out there and good margins hard to come by, so combining businesses to take advantage of the economies of scale that creates makes sense.
Moving Data Select Network Solutions and PJ Media into eXpansys means the business now sells airtime. This is being seen by some as a first step in challenging the high street retailers, at least in the online environment. Quite where that leaves Data Select will be the subject of much industry speculation. Maybe the ever acquisitive Daisy will be sniffing around. However, Peter Jones and Data Select CEO George McPherson have emphatically denied that it will be sold. Jones has hinted at the possibility of further investment.
Well, maybe, but whichever way you look at it, it’s hard not to think that one of the last of the mobile industry big guns is heading for the exit. John Cauldwell followed a similar trajectory as he prepared his exit strategy.
So is Peter Jones arranging his portfolio to make its constituent parts as attractive as possible to potential buyers? It’s too early to say of course, but the rumblings have been around for a while now and this move will add grist to the mill. In the meantime, we can probably expect further consolidation within mobile distribution as the industry continues to mature and the independents feel the squeeze.