Opening new markets and increasing the speed of fulfillment were among the motivations behind Access 8‘s recent acquisition of Lex Tec Inc., according to Access 8 president Joel Litwin.
The two Toronto-area specialty distributors have combined to create a $10 million company, and the merged distributor has moved into a new 10,000 sq. ft. warehouse in Markham, Ont. As both companies are privately-held, terms of the acquisition were not disclosed.
The combined company has 14 employees, and Litwin said the only staff departures were the two former owners of Lex Tec. While the companies have merged both names will be maintained going forward; the phone system will recognize which company is being called for.
“Combined, we’ve been in the computer industry for 46 years,” said Litwin. “We’re still running forward with both names, as both companies have developed a strong following in the names over the years.”
There is some overlap in the two companies’ coverage areas, but also key differences, said Litwin. Access 8 specializes in networking cabling, serving primarily the distributor channel and reseller markets. Lex Tec carries a full range of cables, but has also developed a business in batteries, replacements and interconnect hardware products, and has relationships with vendors such as D-Link, Datalink and Hammond.
“Although we sell to some similar customers, we saw it as an extension of what each of us were doing, and an opportunity to open up another market for us,” said Litwin. “There’s a lot of synergy between the two companies, and we can create a lot of synergies for our customers.”
Lex Tec carried certain vendors that Access 8 didn’t and vice versa, said Litwin, so now the company has the opportunity to stock a wider range of vendors for its clients, and do it more efficiently. For example, he said, Access 8 wasn’t strong in uninterruptible power supplies (UPS), which was a strength for Lex Tech, which also carries replacement batteries. Access 8 can now offer both to its customers as well.
Combined, the companies stock a lot more product, although Litwin notes it’s amazing how quickly a 10,000 sq. ft. warehouse can get filled. But by creating economies of scale though and with a larger company in a larger warehouse, he said it’s easier to manage the space and get shipments in and our more quickly. With the wider range of stock they’ll be able to fulfill customer orders more quickly, making the business more competitive.
“Speed is the name of the game in the computer industry and stock is king,” said Litwin. “If you have stock you can supply your customers and you get the order, and that’s what we can do now.”