Avnet, the US distie giant, yesterday completed the takeover of the enterprise IT division of Magirus, gaining itself an extra $500m-a-year-in annual revenues, 140 staffers in sales, marketing and purchasing, and five new European countries to play with. And Dubai.
The acquisition, annnounced in July, gives Avnet's Technology Solutions arm, additional heft with IBM and HP - the Magirus unit wholesales servers and storage boxes for those vendors. Last month, the company said it's buying Acal IT Solutions, a UK storage area networking distie, for £41m. cash. When that acqusition closes, Avnet Technology Solutions will command $2.5bn annual revenues from Europe. And Dubai.
Avnet is already a player in the UK and Germany. It's new baby hangs out in those countries too, and Austria, Switzerland, Italy, Denmark and Sweden. And did we mention Dubai?
Avnet says the Magirus acquisition is "expected to meet or exceed the company's stated return-on-capital-employed goal and add approximately $0.08 EPS in calendar 2008". It doesn't reveal the purchase price or how it will meet these goals. But in the next breath it says the integration of the acquired business should be done and almost dusted by June 2008. That implies cost savings. Avnet may also get more better prices and bigger marketing kickbacks than Magirus could. And the price that Avnet is paying for the business could be at a discount to the valuation that Wall Street places on Avnet shares.
Avnet is not done with purchases to bulk up its Technology Solutions business. It is on the prowl for "value creating acquisitions that expand our customer base and/or broaden our products and services portfolio," head honcho Roy Vallee said.
Avnet press release. ®