Cost efficiencies were not the reason computer reseller Zones acquired technology products and services provider Corporate PC Source (CPCS) last month. “The success of the acquisition wasn’t predicated on eliminating costs,” says Zones senior vice president/chief financial officer Ronald McFadden. “It was on acquiring a successful company with an excellent management team.”
The $414.6 million Zones, which mails the IT Zone and Mac Zone catalogs, will operate the $95.9 million CPCS as a wholly owned subsidiary. Although Zones is based in Renton, WA, CPCS will remain headquartered in Wood Dale, IL. CPCS president/CEO Christina Corley will retain her position, and the rest of the management team is expected to remain in place as well.
Zones has no plans to mail its catalogs to CPSC customers or to launch a CPSC catalog. CPSC, which relies on outbound telemarketing and field salespeople to sell its offerings, “works with little market collateral,” McFadden says, “so at this point, the two businesses will be run entirely separately.”
In addition, the small and midsize businesses that Zones serves differ from the larger businesses that CPCS reaches. “Our customer files don’t overlap — and that’s a huge benefit right off the top,” McFadden says. “Zones won’t use CPCS’s customer list, because we won’t want to encroach on CPCS’s customer base. We don’t want to upset those elements of CPCS’s success. To try to emulate the Zones catalog concept would add costs above our current cost structure and wouldn’t be the right decision.”
But McFadden won’t rule out other possible synergies. For instance, Zones might get better pricing on its products working through CPCS. In addition, by working with CPCS, Zones might gain certifications to sell items it’s not currently certified to sell.