Ingram Eyes Acquisitions

In a second-quarter results conference call with financial analysts late last week, Ingram Micro executives didn't rule out future acquisitions and said they would like to expand into the consumer electronics and components markets.

"We have focused on strengthening our operations the last four years, and that has resulted in significant improvement in working capital and delivered us to a strong cash position," said Kent Foster, Ingram Micro chairman and CEO. "We will continue to look for profitable growth opportunities. We look at everything we can to identify those opportunities."

San Diego-based Nimax had about $72 million in revenue last year. The acquisition will serve as a launching pad into the $6 billion AIDC/POS market for Ingram Micro, said Kevin Murai, president of the distribution giant. With the deal, Ingram Micro customers have access to Symbol Technologies products.

"Although this is a small acquisition today, it is very strategic in nature. It opens access to a high-growth, high-margin environment. That's one of the key guidelines that we manage our business by," Murai said.

Solution providers said Ingram Micro should be more aggressive to buy its way into new markets.

"I think it's a step in the right direction. There are many specialty niche distributors out there," said Steve Harper, president of Network Management Group, a Hutchinson, Kan.-based solution provider. "Things like RFID should be hot in the months and years to come. With [Ingram Micro's] focus on storage, wireless, security and things in which Nimax is a player, it's a logical progression of things to come."

Other IT distributors, too, are eyeing the AIDC/POS space, where they must contend with entrenched players like Greenville, S.C.-based ScanSource. Earlier this month, Synnex acquired EMJ Data Systems, and last week Tech Data expanded its POS/Data Capture specialized business unit.

If more expansion is in the offing, Ingram Micro took a step forward in its second quarter. For the period ended July 3, the Santa Ana, Calif.-based company beat Wall Street estimates by a penny, posting a profit of $25.9 million, or 16 cents per diluted share. The results topped year-ago earnings of $11.5 million, or 8 cents per share, and represented the distributor's highest second-quarter profit in four years.

On the sales side, Ingram Micro reported an 11 percent gain in revenue to $5.72 billion. The distributor said the sales total was its highest second-quarter revenue figure since 2001.