Arrow Electronics, Inc.
) recently announced that it will acquire all the assets and
operations of the wireless and infrastructure business unit of
Waching Company Ltd.
China based distributor, Waching is well positioned in the
fast growing wireless and infrastructure market.
The company has operations in Shenzhen, Shanghai, and Beijing
and will report sales of $33 million in 2012.
Arrow expects that the acquisition will to propel the
company's expansion into fast growing Asian markets.
Electronic components and computer products distribution is a
low-margin business and Arrow, being a player in this market, has
retained a keen eye for profitable acquisitions. The company has
completed five acquisitions during the first six months of
These acquisitions are will likely to enable Arrow to enter
new markets, diversify and broaden its product portfolio and
maintain its leading position in the global market. Moreover, the
company's continuous acquisitions are expected to be a good
contributor to its revenue stream going forward.
Arrow has a well-diversified business spread across
geographies, products and markets. Backed by worldwide
acquisitions across the world, cost effective strategy and
operating excellence, the company hopes expects to drive its
profitability, going forward.
Last month, Arrow entered into a distribution agreement with
Altia, Inc. The venture undertaken is to aimed at directly
distribute distributing Altia's advanced and customized graphical
user interfaces with the help of the company's key silicon
partners. By adding these solutions to its offerings, Arrow will
be engaged in supporting various companies, which use less costly
or high power graphics.
However, it should be noted that Arrow is subjected to
significant competitive pressures from the likes of
Richardson Electronics Ltd.
Avnet's operating unit, Avnet Electronics Marketing Americas,
recently entered into a distribution contract with Measurement
Specialties, Inc. (MEAS). Hence, to compete successfully, Arrow
must excel in terms of product quality and innovation, customer
service, technical and computing capabilities and price
We also maintain a long-term 'Neutral' recommendation on the
stock. Our recommendation is supported by a Zacks #3 Rank on the
stock, which translates into a short-term rating of
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