Ingram Micro To Acquire AVAD

Fort Lauderdale, Fla.-based Avad is a privately held alliance of 12 regional distributors. It has about 280 U.S. employees, and its sales totaled roughly $200 million last year.

Under the deal, Ingram Micro won&'t pick up Avad's acquired cash, long-term debt or other business liabilities. The purchase is expected to close in about a month. During that time, Avad's 12 regional distributors will unify into one company that Ingram Micro will buy.

Santa Ana, Calif.-based Ingram Micro plans to keep the Avad name and run the company as a separate unit, similar to the way it handled last year&'s acquisition of POS/AIDC distributor Nimax, according to Keith Bradley, president of Ingram Micro North America. "Ingram Micro will provide enhancements in key support areas, such as finance, human resources and information systems, but we will preserve Avad's customer-facing functions, such as sales, marketing, purchasing, technical support and showroom facilities,” Bradley said in a statement.

The acquisition furthers Ingram Micro's push into the home and consumer-electronics space, which is converging with business technology. The distributor launched a home-focused business last year and recently opened two digital home solution centers at its Santa Ana and Williamsville, N.Y., facilities.

"The lines between home and office are blurring," Ingram Micro President and COO Kevin Murai said in a statement. "Many homes are being built or renovated with centralized electronic systems to combine data, entertainment and everyday conveniences, such as lighting and appliances. Avad's customers are on the front lines of the convergence trend, selling and installing everything from home theater systems to lighting, security and centralized controls.”

Avad has about 8,000 digital integrator customers served through 28 locations, which include product showrooms, distribution centers and training locations. The company distributes products from manufacturers such as Fujitsu, Bose, Sharp, Samsung, Niles Audio and Lutron, and its revenue has increased about 35 percent annually since 2002.

"This acquisition accelerates our consumer-electronics initiative and provides another key platform for growth," Ingram Micro CEO Greg Spierkel said in a statement. "We view this as an opportunity to further differentiate Ingram Micro and enter a profitable and growing new market. Technologies for the home are becoming more complex, often requiring sophisticated experts to install home automation and entertainment. Avad is one of the only meaningful distributors for custom installers in the consumer-electronics and home automation space--it is the far-and-away leader."

Bob Gartland, president and principal founder of Avad, will remain with Ingram Micro as president of the Avad business unit, along with other members of the Avad management team, Bradley said.

"This acquisition is great news for our employees, affiliates, customers and manufacturer partners," Gartland said in a statement. "We've been expanding our capabilities and extending our reach across the electronic systems contractor base for many years. We are building a dealer-to-builder program to help connect our customers to the growing new-home construction market, and we have led the industry in dealer training and CEDIA certification. Now as a subsidiary of Ingram Micro, we'll have the resources and the capital to enhance our dealer services and accelerate our expansion plans."

Ingram Micro said it expects the acquisition to add about 2 cents per share in fiscal 2005 and about 5 cents per share in fiscal 2006 to its earnings. Shares of Ingram Micro were trading at $15.77 Tuesday morning, up 3 cents per share.