KEY POINTS:
The New Zealand distributor for Apple products like iPods is plugging directly into the retail business, helping to allay threats to its wholesale operation.
Apple Mac New Zealand distributor Renaissance Corporation has bought the country's largest Apple reseller - MagnumMac - a purchase that may insure the company against any future squeeze by the global IT giant.
Renaissance announced yesterday it had paid $3.5 million for MagnumMac, which has outlets in Auckland, Wellington, Christchurch and Dunedin with annual sales last year of $28 million and earnings before interest and tax of $1 million.
The payment to MagnumMac owner Murray Wood is through two million $1 shares and he will take up an executive position at Renaissance, running the MagnumMac business.
First New Zealand Capital analyst Chris Burke said the purchase made sense for the company, whose performance depended heavily on its relationship with Apple.
In most countries Apple operates a separate division but here it deals through Renaissance in this market.
Apple's decision to keep control of iTunes and to sell directly through its New Zealand website is understood to have cut margins.
"There have been rumours for three to four years that they could lose the Apple wholesale business. It's something that affects the stock now and again," Burke said.
"This embeds them into Apple's supply chain a bit more, so perhaps it is an incentive for Apple to not change the current arrangements."
Shares in Renaissance closed yesterday at 97c up 1c.
