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Insight CEO, CFO: We're In Good Position To Make Acquisitions

After making necessary adjustments over the past few years, Insight top executives said that they think the company is finally in a good position to make an acquisition.

After making necessary adjustments over the past few years, Insight top executives said that they think the company is finally in a good position to make an acquisition.

While the Insight executives didn't say that there was an acquisition in the works, they did say that the solution provider, No. 14 on the CRN SP500 list, is in a strong position to make such a move if it wanted to, which executives agreed hasn't necessarily been the case in past years.

"I think we're now well-positioned and we will start to think about M&A activity," Senior Vice President and CFO for North America Helen Johnson said at the Raymond James Systems, Semiconductors, Software and Supply Chain Conference in New York this week.

[Related: Presidio Acquired By Private Equity Firm Apollo Global Management]

In particular, she said that Insight would be focused on adding services capabilities in the U.S. and Europe.

"As we think about that in 2015, we certainly have the capital to support both M&A and any purchases that we have, and we have a consistent methodology around that," Johnson said.

Part of what's driving that capability is a strong cash flow, CEO Ken Lamneck told investors at the event. Lamneck outlined Insight's strategies for future cash use as threefold: organic investments, mergers and acquisitions, and share repurchases. Share repurchasing is the preferred method outside of merger-and-acquisition activity for excess cash, Johnson said, but the three options will be prioritized based on their estimated returns.

That being said, Johnson said that Insight is "cautious" with its working capital to make sure it can accommodate the "significant working capital needs in the business."

Part of what makes the timing right for Insight M&A activity is the significant progress the solution provider has made with internal IT systems integration projects, Johnson said. Over the past few years, Insight has been working hard to integrate all employees and regions onto the same systems, a problem that lingered after past acquisitions were not fully integrated. Lamneck said that across the company, there were four ERP systems, 5 CRM systems and a variety of ticketing systems.

"We didn’t want to do any significant scale acquisitions in that environment because we would just be adding to that problem," Lamneck said.

Now the company is on one ERP system, using SAP, and one CRM system, using SAP CRM Online. Most recently, Insight integrated its ASIA PAC region successfully onto the SAP systems, he said. Integrating the company under one system helps cut back on overhead and makes future acquisitions much easier.

"We're now in a very comfortable position to execute acquisitions. That wasn't clear a very few years ago. We didn't have the clarity to do that," Lamneck said.

PUBLISHED DEC. 9, 2014

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