Ingram buys Aussie distie for $493m
Doubles Asia Pac business
Ingram Micro is shelling out $493m cash including assumption of debt for Tech Pacific, an Australian distie.
The deal will see Ingram's Asia Pac operations double in size. Sydney-based Tech Pacific turned over AUS$3.1bn ($2.2bn) in 2003, generating operating margins of two per cent. It is the market leader in Australia and New Zealand.
Ingram, the world's biggest IT distie, is to integrate Tech Pacific into its own Asia-Pac business, which suggests job losses and property closures to us. It inherits 1800 people and 15 distribution centres in Australia, New Zealand, India, Hong Kong, Malaysia, Singapore and Thailand.
Ingram expects the deal to be accretive to 2005 earnings, excluding integration costs. It anticipates some revenue loss, dues to market overlap in some countries - in other words, there will be less credit to go around for resellers. But it also expects cost savings and improved operating margins to outweigh this. ®
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