Contact: Brian Satterfield
Technology M&A deal volume in the beginning of the third quarter is far outpacing the year-ago period, with particular help coming from IT distribution giant Avnet Technology Solutions. The Phoenix-based firm has already announced three acquisitions this quarter. (Overall, Q3 volume through July 10 hit 119 deals worth $9.8bn, versus just 71 deals worth $6.7bn in the year-ago period.)
Continuing with an M&A strategy that it has employed frequently in the past, Avnet further extended its global IT distribution footprint last week by purchasing three foreign competitors.
The first couple of acquisitions Avnet announced – German IT distributors Magirus and Altron – bolstered the company’s European presence. Magirus and Altron give Avnet access to more than 6,500 customers in the region and mark the company’s third and fourth buys in Germany. After taking a brief break for the US’s Independence Day, Avnet returned to its international dealings last Thursday, reaching into Japan for 40-year-old semiconductor distributor Internix. Internix generated $260m in trailing revenue, making it one of the largest targets Avnet has ever acquired.
Inorganic international expansion is fairly typical among large IT distributors. Nearly all (80%) of the 26 IT distribution firms Avnet has acquired over the past decade have been headquartered overseas. Competitor Ingram Micro has also employed this approach in 11 of its 13 distribution acquisitions. However, we’d note that international expansion isn’t the only game being played. Ingram Micro’s biggest deal, which also came last week, wasn’t made in the interest of moving into new geographies. Ingram Micro announced on July 2 the priciest acquisition in the distribution sector in nearly four years when it paid $650m for Indianapolis-based BrightPoint in order to strengthen its mobile device offerings.