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March 26, 2012
 
Transaction Analysis
Avnet, Inc. (NYSE: AVT) to Acquire Ascendant Technology, LLC

 

Financial Overview:

  • Revenue: $90M
  • Terms of the transaction have not been disclosed.  

 

martinwolf Analysis:

  • Avnet (AVT), a worldwide distributor of computer products and components with over $25B in revenue, has signed an agreement to acquire Ascendant Technology, an international IT consulting firm specializing in end-to-end IBM solutions. The terms of the transaction have not been disclosed.
  • The acquisition will allow AVT to continue to diversify away from traditional distribution. The shift to services is a strategic one as Ascendant's diverse set of service offerings will drive sales around e-commerce, digital strategy and web content management. Avnet hopes to cross sell product to Ascendant's mid-market client base via AVT's reseller channel.
  • In addition, the deal should add value to AVT technology partners and the IBM-centric channel, as Ascendant's high margin consulting services should help the business lines expand. However, AVT may have to address potential channel conflict with its IBM resellers as AVT competes for services with those resellers.
  • AVT has made a series of acquisitions unrelated to the traditional distribution space as it shifts its focus to enhancing services and software capabilities to drive growth for suppliers and value-added resellers. In the last six months, acquisition announcements have included:
    • Jan 2012 - Canvas Systems, LLC - Reseller
    • Dec 2011 - Round2, Inc - Electronics recycling
    • Dec 2011 - Hartford Computer Group, Inc - Reseller/Services
    • Nov 2011 - Pinnacle Data Systems - Services
  • With the acquisition of Ascendant, an IBM solution provider, it is not unlikely that acquisition of an SAP and Oracle focused IT services provider could follow.
  • The space continues to diversify as both AVT and Arrow Electronics (ARW), two of the large electronic distributors, seek higher profit margins in other business segments. For example, ARW acquired Shared Technologies in Sep 2010 and Cross Telecom in May of last year, underscoring how cloud computing increases the importance of VARs adding services components to their offerings.
  • The M&A market is strong, with cash-rich buyers looking to consolidate and valuation expectations remaining within a range where deals can get done.
  • martinwolf expects broad-based as well as specialty distributors such as Tech Data, Synnex, and Ingram, to consider diversifying and sell products and services to end users to further disrupt the IT supply chain.

Please go here to read the press release.

 

martinwolf was not the adviser in this transaction.  

 

To learn more about this transaction or our firm, contact Tim Mueller tmueller@martinwolf.com

About martinwolf    

 

Based in Silicon Valley, martinwolf is a leading middle market M&A Advisory focused on companies with services-based business models. Since 1997, our team has completed more than 115 transactions in six countries. We are a five-year member of the Merrill Lynch PS Referral Network, and were selected as ICICI Bank's (India's leading private bank) exclusive strategic partner for acquiring U.S. IT companies. martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com.

   

December 1, 2011

Softchoice Corporation (TSX: SO) announced it has it has fulfilled its regulatory requirements under the Competition Act and has now completed the acquisition of substantially all of the assets of UNIS LUMIN, one of Canada's most highly regarded Cisco networking and managed services companies. Softchoice was represented by martinwolf | M&A Advisors. The acquisition strengthens Softchoice's professional services capabilities while providing the technology foundation to support the Company's future cloud offerings.

Please click here to view the announcement.   

 

September 30, 2011

SPS, a leading Unified Communications Provider, announced that Court Square Partners has made an investment in the company. martinwolf | M&A Advisors represented SPS in this transaction. SPS is a premier unified communication services integrator, ranked 131 on the 2011 VAR 500 list with 2010 sales of $143 million. Court Square is a $4B+ New York-based PE Group, with more than 150 lifetime investments.  

Please click here to view the announcement. 

      

September 20, 2011  

Accel-KKR, a technology-focused private equity investment firm, announced that it had taken a majority stake in Infinisource. Infinisource is a leading benefits administration technology and services company. martinwolf | M&A Advisors represented the seller in this transaction.  

Please click here to read more.    

         

martinwolf | M&A Advisors 2012    

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