Arrow Buys Shared Technologies for Unified Communications and Managed Services
Shared to operate under Enterprise Computing Solutions business unit. Deal enables distributor to tap into $60 billion market opportunity.
Distributor Arrow Electronics Inc. said that it will purchase Shared Technologies Inc., a $250 million, Coppell, TX-based provider of unified communications and managed services solutions in operation since 1974.
Shared will operate within Arrows Enterprise Computing Solutions North America group, the companys $1.35 billion software, storage, servers and services distribution arm.
Officials said that the acquisition is important because it gains Arrow immediate entrance into market segments valued at some $60 billion in sales opportunities.
"This acquisition builds on our strategy to diversify into faster growing, high-margin markets that are complementary to our existing businesses," said Andy Bryant, Arrow ECS president.
"Shared represents an exciting opportunity as we add a leading player in the unified communications, telephony, and managed services industries to our product portfolio, Bryant said. They bring deep customer and supplier relationships as well as extensive industry and technical expertise."
Arrow has long positioned itself as uninterested in selling around its channel partner constituency to end customers but its ownership of Shared not only enables it to address markets previously untended but also allows it to deal directly with clients in those segments.
At this point it is unclear what, if any, impact that sales dynamic will have on the companys relationships with its channel partners.
Shareds target markets for its portfolio of voice, data and converged technologies solutions include enterprise customers, government and health care. The company recently launched an investment protection program for legacy Nortel customers.
Arrow, based in Melville, NY, recently reported sales of $4.61 billion for its second quarter 2010, a 36 percent jump from the same period last year, and net income of $116.2 million, a whopping 450 percent leap from the similar quarter in 2009.
Officials credited some $3.26 billion in global component sales, a 44 percent climb year-over-year, for driving the companys financial performance for the period.
Arrow said that it expects the Shared purchase will add $.10 to $.12 per share to earnings in the first full year of operations.
Terms of the transaction were not disclosed. The deal is expected to close by the end of September.