Dicker Data (ASX:DDR) share price sets record high on acquisition update

The computer hardware and software company reached record highs this morning.

| More on:
An excited man stretches his arms out above his head as he reaches a mountain peak representing two ASX 200 shares reaching multi-year high prices today

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Dicker Data Ltd (ASX: DDR) share price has jumped to its record high in early trade after Dicker confirmed the acquisition of Exeed Group last Friday.

Here we cover the moving parts of the deal and how the market has reacted so far.

But first, quick recap on Dicker Data

Dicker Data is a wholesale distributor of computer hardware and software products.

It has a footprint in Australia and New Zealand, although derives most of its revenue in Australia.

At the time of writing, Dicker Data has a market capitalisation of $2 billion.

Dicker to acquire Exeed Group

On 30 July Dicker announced it had entered into a binding agreement to acquire IT distribution company Exeed Group for $68 million.

The transaction would be finalised under a supported cash advance facility from Westpac bank. Dicker anticipates completing the transaction by the end of August.

Buying Exeed Group is a "very satisfying outcome" for Dicker, according to its chair and CEO David Dicker, who also believes the "combined companies are highly synergistic".

As a result of the Exeed acquisition, the company gains access to revenue of NZD$310 million, alongside NZD$70 million in Australia.

Furthermore, Dicker Data anticipates the transaction will "propel Dicker Data NZ to become the second largest IT distributor in New Zealand". Dicker forecasts combined revenue of NZD$500 million for the merged companies.

Investors have jumped on Dicker shares since the market open, viewing the news as a favourable outcome for the company.

Dicker shares are now exchanging hands at $12.85 apiece, an 11% jump from market open, and also setting a record high.

Dicker Data share price snapshot

The Dicker Data share price has posted a year to date return of 23%, extending the previous 12 month's return of 69%. In the past month, Dicker shares have climbed 16% into the green.

These returns have outpaced the S&P / ASX 200 index (ASX: XJO)'s return of around 23% over the past year.

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »