US dealer group TriMega has received a boost to its membership with the announcement that technology buying group INTEC is merging into the office supplies organisation.
Indianapolis-based INTEC was formed in 1982 by Jerry Jones of Cannon IV and Bill Cullinan of Governor Business Solutions. Its 25 members today generate more than $300 million in combined annual sales.
The combined INTEC/TriMega organisation now exceeds 600 members throughout the US with more than $3.8 billion in annual sales.
TriMega President Charlie Cleary told OPI that the merger cements the relationship that the two groups have had over ten years with their TriTEC strategic alliance, but he pointed to several additional benefits arising from the arrangement, such as:
- The ability of TriMega to negotiate on behalf of INTEC’s $300 million of collaborative volume, something that hadn’t been available previously
- Synergies and efficiencies – including reduced staffing costs – with INTEC being run from TriMega’s headquarters in Rosemont and the closing of its office in Indianapolis
- The addition of INTEC’s expertise in the managed print services (MPS) field and the possibility of TriMega introducing its own MPS programme
- Opportunities for the Marathon and Business Source brands. INTEC members will continue to be offered their own Marathon private label brand which could benefit existing TriMega members, and Business Source will be available to INTEC members.
INTEC’s decision to move into the TriMega fold was prompted by the decision of its longstanding President/CEO Dennis Hardy to retire in the first quarter of this year, leading to a reassessment of the group’s strategic options.
INTEC dealers will have similar membership terms to other TriMega members but will remain as a sub-group within the whole organisation with their own brand and marketing support. The INTEC name and branding will also continue to be used and will include the addition of the subheading ‘Powered by TriMega’
Currently, INTEC dealers are technology-oriented resellers that sell OP to varying degrees. However, Cleary said it was a category that they had expanded over the last ten years or so and there was now an opportunity for further expansion.
Under pressure
The news of the INTEC deal is timely for TriMega, as its membership numbers have been under pressure over the last few years from forces such as the Pinnacle Affiliates group for larger dealers and rival group Independent Stationers, which has had the upper hand in the public sector with its US Communities and FSSI federal government contracts.
The INTEC merger now takes TriMega’s membership back over the 600 mark. However, Cleary said that – excluding INTEC – the net change in membership in 2011 was plus 30, including ten dealers that had left in 2010 rejoining. Of the 20 that left during the year, Cleary confirmed that the majority were due to dealer consolidations or being acquired by WB Mason.
2012 looks like a pivotal year for a number of TriMega’s investments. Under the spotlight will be the Point Nationwide national accounts programme, formed in mid-2010 in partnership with SP Richards.
The target was for the Point Nationwide platform to be handling $100 million in top-line sales in three years. That figure is undoubtedly still a long way off – although TriMega is not disclosing its sales figures. However, the programme gained some traction in 2011 with its ‘piggyback’ arrangements for the TCPN (state and local government) and FSSI (federal government) contracts. According to Cleary, FSSI was performing “significantly” ahead of expectations while TCPN was enjoying “very nice growth”, and he expects both programmes to show “significant growth” in 2012.
Regarding the national accounts programme in the private sector, Cleary said “hundreds” of organisations that were members of business associations were purchasing under the programme and that 20 large corporate accounts are now on board.
Things look to be going in the right direction, but – given the investments made – Point Nationwide clearly has to deliver some serious growth in 2012.
