Ingram Steps Up Digital Push With Deal To Buy Avad

Avad, Fort Lauderdale, Fla., is a group of 12 independently owned digital home distributors that operate on a regional basis and sell home-automation, audio/ video, surveillance and other products. Ingram Micro, Santa Ana, Calif., was building its own home-focused business, but it felt that purchasing Avad, the largest player in that space with $200 million in revenue last year, was a better investment, company executives said.

"The traditional IT VARs are interested in entering this new space. We can help them get familiar with the space," said Keith Bradley, president of Ingram Micro North America. "At some point in the evolution, they will want to make investments in it, get CEDIA, HTI certifications, and there will be some migration to the Avad subsidiary to get access to all those vendors. We are able to facilitate that transition now."

The purchase is expected to close in about a month. In that time, Avad's 12 companies will unify into a single company. Ingram Micro plans to keep the Avad name and run it as a separate unit going forward, Bradley said.

"Adding some products and expertise instead of trying to grow it themselves shows that Ingram is serious about this market," said Phil Ferranti, CEO of The Technology Company, Pittsford, N.Y., a 25-year-old solution provider that recently started selling digital home solutions.

"If we don't have to go to three or four suppliers, it makes my life easier. I've got a back end with Ingram, I can use their [solutions] center, I have a credit line and a 15-year relationship," he said.

Bob Gartland, president of Avad, expects IT solution providers to expand their businesses to digital technologies. "We started with what was a traditional audio/video/entertainment slant. As the custom market evolved to a wider audience, we have seen the best and the brightest adjacent technologies come to us," he said. "Certainly having access to the customers may provide us with some opportunities we didn't have before. But we do have a fairly high bar in terms of knowledge, expectations for our dealers. My guess is they would have to be committed IT dealers for that [business] to migrate toward us."