With a major acquistion and a host of distribution agreements inked recently, it’s been a busy year for EMJ Data Systems Ltd. and president Jim Estill. The Guelph, Ont.-based distributor effectively doubled the size of his business, and, as Estill says, made things “”exciting again.””
With its
US parent company, Daisytek International, in reorganization under the bankruptcy code, EMJ was able to come in and acquire the Daisytek Canada subsidiary in August.
The deal created a company with combined sales of $400 million, doubling the size of EMJ’s business, and opened up new markets with toner cartridges and ink.
“”Last year without Daisytek our sales increased by only 4.5 per cent, that’s kind of boring and not very fun, it just doesn’t excite anybody,”” says Estill. “”So, we did Daisytek. That makes it exciting, and fun again.””
Estill expects the acquisition to drive sales growth by another 15 to 20 per cent next year, with EMJ selling to Daisytek customers, and Daisytek selling to EMJ’s customers.
Since Daisytek Canada was profitable and doing well, and has its own niche, the company will continue to be separate for marketing and branding purposes, with a sales force separate from EMJ’s. The primary difference, Estill says, will be the cross-company customer sales.
“”It’s a huge deal for us, and it’s a pretty big deal for the industry as well,”” says Estill.
In particular, he says the deal will keep competition strong in the industry, as EMJ and Daisytek weren’t direct competitors. EMJ wasn’t active in the supplies business, while Daisytek wasn’t strong in hardware/software, so they complement each other nicely.
“”Had a direct competitor to Daisytek purchased them it would have meant there was less competition for the resellers and the manufacturers,”” says Estill. “”We’ve found tremendous support in the reseller and manufacturer community.””
Half of EMJ’s resellers weren’t dealing with Daisytek, and half of Daisytek’s resellers weren’t dealing with EMJ, so Estill says the acquisition gives them more visibility and another source to buy from.
At Daisytek, vice president of sales and marketing Suzanne Barrette says it’s business as usual since the acquisition, with both internal and external audiences excited about the new arrangement.
“”It’s been really wonderful,”” says Barrette. “”EMJ is a great organization, and working with Jim (Estill) has been a real pleasure.””
Barrette says Daisytek is back on track and there have been no major changes within the organization, with people operating mainly as before. The major differences are that Daisytek is now completely Canadian-owned, and with the influx of financing from EMJ, has been able to add more resources to the business.
“”A lot of customers have come on board, whether it be through EMJ or Daisytek, because of the relationship between the companies,”” says Barrette.
It’s a welcome change from the days when Daisytek was operating in a sort of limbo, with its parent company in trouble and their own future in doubt.
Despite more than doubling in size, Estill insists EMJ remains a niche player with no plans to take on the big boys, especially in the U.S.
“”We’re not going to be a mainline commodity distributor, we’re going to remain a niche distributor, for sure,”” says Estill.
EMJ still does 95 per cent of its business in Canada, and remains focused on the Canadian market. Estill says Daisytek itself was a niche player, just in a different niche, and EMJ remains a niche player with $400 million in combined sales, versus $50 billion for some of the big US-based companies.
“”It’s pure craziness to go head-on against a huge competitor on their turf,”” says Estill. “”You’re much better off to fight little battles in areas they’re not focused on.””
One of those areas is data collection and bar-coding, and that dominant position was strengthened through an agreement with Intermec Technologies Canada to supply Intermec’s line of wired and wireless automatic data collection gear to EMJ’s network of resellers.
“”If you’re big or dominant in an area like bar-coding, which we are, you tend to build momentum because your expertise is high and you tend to get to know and learn a product real well,”” says Estill. “”The more you sell something in a specific area the stronger you tend to become.””
Estill had a lot on his plate besides the Daisytek. During the year EMJ also inked major partnerships and distribution agreements with Sharp Systems of America, StarTech.com and Dantz, and marked 10 years as an Apple Canada distributor.