Avnet, Inc
. (
AVT
) recently completed the previously-announced acquisition of
Germany-based distributor Magirus Group (Magirus).
Magirus primarily distributes data center solutions and
services. The company also provides software, system and other
solutions to approximately 11 markets across Europe and the Middle
East.
The solutions provided by the company include virtualization,
storage management, cloud computing, security, intelligent
networks, open source and information life-cycle management
services.
Magirus generated revenues of $530 million in 2011, up 20% year
over year. This acquisition is expected to be immediately accretive
to Avnet's bottom line and will help the company achieve its target
of 12.5% in return on capital (ROC) over the next two years.
Avnet expects the acquisition to broaden its footprint in
Europe, Middle East and Asia. Additionally, Magirus' wide product
portfolio will expand Avnet's product offerings and enable it to
meet the increasing customer demand for integrated and virtualized
solutions.
With a team of over 400 business and technical professionals
that provides support to 4,500 resellers, system integrators and IT
service providers; Magirus will be integrated into Avnet Technology
Solutions' EMEA business.
Meanwhile, Avnet's other operating unit, Avnet Electronics
Marketing, recently entered into a distribution contract with Triad
Semiconductor in America. With this association, the company will
now be engaged in supplying Triad's low-cost mixed signal ViaASIC
solutions in Americas.
Established in 2002, Triad Semiconductor manufacturers low-cost
mixed signal ASICs through its unique via-configurable array (VCA)
technique. Triad's VCAs have almost the same features as the field
programmable gate arrays (FPGAs) and it also consists of analog
cells, which help in integrating analog and digital circuits.
Now, with the agreement, Avnet's clients in the medical,
industrial, consumer and automotive sectors will be able to easily
integrate various semiconductor solutions through Triad's
cost-effective ViaASIC services. Management stated that the
contract would not only expand the company's product portfolio but
also address customer needs more efficiently. Triad's exclusive IC
technique is expected to provide cheaper and faster IC integration
to the company's clients.
The company's continuous contract wins and strategic
acquisitions are expected to boost its long-term potential. We
maintain a long-term 'Neutral' recommendation on the stock. The
company currently retains a Zacks #5 Rank, which translates into a
short-term 'Strong Sell' rating.
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