Bloomberg News

Index of Turkey Open to Strategic Partners, to Grow Sales 5%

July 05, 2012

Index Grup of Turkey, an importer and distributor of information technology equipment, is “open to strategic partners” for its units and halved its sales growth target to five percent this year, chief executive Erol Bilecik said.

Index Grup, also involved in technology equipment logistics and after-sale services, will sign agreements this year with two telecommunications companies in Turkey to offer them outsourcing services, Bilecik said in an interview in Istanbul today.

Index Grup, whose units include listed Indeks Bilgisayar Sistemleri Muhendislik Sanayi & Ticaret AS (INDES), Datagate Bilgisayar Malzemeleri Ticaret AS (DGATE) and Despec Bilgisayar Pazarlama & Ticaret AS (DESPC), is importing and distributing more than 200 brands including Hewlett-Packard, Lenovo, Apple, Asus, Microsoft, IBM, Sony, Cisco and Epson in personal computers, smart devices, computer hardware and other equipment to dealers in Turkey.

“We have a strong financial position and therefore aren’t in urgent need of cash,” Bilecik said. “But we are open to partnership talks with an international strategic distributor of technology equipment which can help us expand know-how.” Index doesn’t want a private equity firm as partner, he said.

Index Grup foresees about 5 percent expansion in sales this year, in line with its growth forecast for the domestic market and less than a 10 percent forecast at the beginning of the year, Bilecik said. “Consumer decisions on transition from notebooks to tablets aren’t fully established and this is affecting the market adversely this year,” he said.

“We want to focus on value-added services including cloud computing and offer after-sales services to companies which buy equipment from us,” Bilecik said. “The market was flat in the first half of the year. We expect a pickup in the second half, especially in the last four months.”

Real Estate

Index Grup, which has headquarters and logistics warehouses in Istanbul’s central Ayazaga district, plans to agree with a building group within three months for a real estate project on its 40-acre land under a revenue-sharing deal, Bilecik said.

The company will move its headquarters to another location in Istanbul in 2013, and will invest $20 million to build warehouses on a 30-acre land it is looking for between Tuzla and Izmit towns, to the east of Istanbul, he said. “Income from the real estate project will be spread to our financials over the coming years,” he said.

Bilecik and his family, founders of the group, bought back 35.6 percent stake in Indeks Bilgisayar from five Greek banks including EFG Eurobank Ergasias SA (EUROB) in May for 48 million liras ($27 million), Bilecik said.

Index may buy companies in Turkey should there be opportunities after its purchase of a 55 percent stake in Alkim Bilgisayar, a after-sales services company in Turkey, for $3.3 million in May, he said.

Indeks Bilgisayar rose 0.3 percent to 3.2 liras at 4:40 p.m. in Istanbul while Datagate Bilgisayar fell 0.7 percent to 2.93 liras and Despec declined 0.9 percent to 2.1 liras. The main share index dropped 1.1 percent.

To contact the reporter on this story: Ercan Ersoy in Istanbul at eersoy@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net


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