Insight Acquires Treasure Chest

Share this article:
Computer direct marketer Insight Enterprises, Tempe, AZ, deepened its product selection and extended its customer base last week by acquiring Treasure Chest Computers Inc., New Orleans, for $10 million of Insight common stock, with additional profitability considerations.


The purchase bulks up the number of Insight's motherboard offerings to about 20 from only three or four previously. Treasure Chest, meanwhile, is watching its offerings expand to about 50,000 products from 2,000 as a result of the deal. The two direct marketers have a customer overlap of only about 10 percent, and Treasure Chest's buyers have demonstrated a willingness to buy over the Web, said Stanley Laybourne, Insight's chief financial officer.


"If you look back nine, 12 months, 20 percent of (Treasure Chest's) sales have been unassisted Internet sales," Laybourne said. "So the customer that they're getting is a very technically savvy customer, and that's certainly something that's appealing to us simply because that is such a big focus of Insight. We believe e-commerce will definitely be a larger and larger portion of our business as soon as the business buyer adopts it more."


Analysts estimate the deal will become accretive to Insight in the second half of 1999. Treasure Chest had sales of $50 million in the 12 months ended July 31, while Insight's 12-month sales for the period ended June 30 were about $800 million.


Laybourne said Insight is looking at more acquisitions and the company's strategic focus is in the international arena, particularly Europe. In April, it closed its first acquisition, buying Choice Peripherals, a U.K. computer direct marketer whose sales were mostly consumer-oriented. A full 91 percent of Insight's revenue comes from business customers, including government and education, while 40 percent of Treasure Chest's sales are to businesses.


Insight reported revenue of $237 million in the second quarter of 1998, up 70 percent from the same period the year before. Earnings for the quarter were $4.7 million, a 59 percent improvement on the second quarter of 1997.
Share this article:
You must be a registered member of Direct Marketing News to post a comment.
close

Next Article in Agency

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

More in Agency

Are You Really Ready for Customer Experience?

Are You Really Ready for Customer Experience?

Marketers can talk a good game about customer centricity, but actions speak louder than words.

Essentials in Content Marketing: Think like a best-selling author

Essentials in Content Marketing: Think like a best-selling ...

Imagine if all the electronic content thrown your way daily was actually printed on paper. To stand out from those piles of worthless pixels, you must offer your audiences intriguing ...

The Mobile-Email Marriage

The Mobile-Email Marriage

Marketers who considered leaving email at the altar are finding renewed passion for the channel as an ever-increasing number of customers triage, read, and click-through email on their smartphones.