Emtec Merges With Westwood Computer

Two New Jersey-based technology companies, Emtec (No. 219 on the 2005 VARBusiness 500) and DARR Westwood, the parent company of solution provider Westwood Computer (No. 191 on the VAR500), have merged. The combined company, which has more than $240 million in annual revenue--$129.9 million in fiscal 2004 from Westwood and $112.7 million from Emtec--will continue to operate under the name Emtec. The merger gives Emtec a stronger presence in the federal-government market via Westwood's contracts, and also helps Emtec expand into additional regions in North America, such as Virginia and other locations in the South and Western United States. Westwood shareholders received 55.7 percent of Emtec's issued and outstanding common stock through the merger.

The merger also created some management changes for the two companies. Westwood executives Dinesh Desai, Keith Grabel, Brian McAdams and Greg Chandler have joined Emtec's board; Desai has taken over as chairman and CEO. Meanwhile, John Howlett, former Emtec CEO, and Ron Seitz, former COO, have taken on new roles. Howlett is now president of Emtec Northeast, and Seitz is president of Emtec Southeast. Grabel, formerly president of Westwood, will continue as president of the combined company.

Emtec completed the merger with assistance from the Commercial Distribution Finance unit of GE Commercial Finance, which Emtec officials say provided the solution provider with enough working capital to secure the deal. In addition, GE's inventory and accounts-receivable facilities helped Emtec expand its operations and bring aboard Westwood's federal-government business. The new Emtec saw a net-income increase of more than 20 percent for its most recent quarter, marking the seventh consecutive quarter of profitability for the company.