Ingram Micro Acquires Asiasoft - Analyst Blog

Ingram Micro. (IM), the leading distributor of Information Technology (IT) products and supply chain solutions recently completed the acquisition of Asiasoft Hong Kong Limited, one of the value-added software distributors with a major presence in Hong Kong.
 
Asiasoft caters to a broad range of customers ranging from large enterprise to small and medium-sized businesses, and represents vendors such as Citrix, VMWare, Adobe and Symantec.  The company has six specialties, including virtualization, security system and desktop management, networking, business continuity and applications.
 
Ingram Micro did not disclose the terms of the acquisition, although the company expects it to strengthen its business model. The company also expects the acquisition to strengthen its presence in enterprise computing.
 
Moreover, the acquisition marks the continuation of Ingram’s recent acquisition spree, as the company recently announced the acquisition of a distribution company named Albora Soluciones, based in Barcelona, Spain. The Spanish acquisition will be made through the EMEA arm of Ingram Micro and is expected to enhance its capabilities in the Virtualization, Security and Middleware Solutions segments.
 
As per the latest findings of the market research firm iSuppli, industry-wide PC sales in the first quarter jumped almost 23.0% compared with the year-ago quarter. The firm is of the opinion that this has been the best performance by the PC segment ever, and the segment has made a strong recovery following the year-long recession. This apart, server sales have also rebounded strongly during the same period.
 
This revival in IT spending, PC sales and server growth will result in increasing demand for software products, thereby leading to increased utilization of the distribution channels, resulting in enhanced business opportunity  for Ingram.
 
On the other hand, for the second quarter, though the company expects revenue to be seasonally softer than the first quarter (attributable to the spring holidays), it believes that solid operating leverage and better expense control will enable it to deliver strong results.
 
We have a Neutral recommendation on Ingram shares.