Electronics and IT distributor
) recently announced that it will acquire N.J.-based cloud and
data center automation service provider, Seamless Technologies.
Financial details of the deal were kept confidential. The
acquisition reflects further strengthening of Avnet's cloud
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Seamless Technologies, a 21-year old company, specializes in
delivering cloud services such as public/private cloud IT,
automation, integration and virtualization. Seamless serves
financial services, healthcare and insurance sectors. The company
has strong ties with the tech giant
BMC Software Inc.
Avnet believes that Seamless' cloud services will smoothly
integrate with its core service offerings. The company is
optimistic that the combined offerings will help drive delivery
and implementation of large-scale private/hybrid/public clouds.
Avnet sees that most of its channel partners are hardware-centric
and keeps on finding out ways to add value to the hardware
offered. The broadening of cloud services will help to attach
more value to hardware and will allow its partners to be more
Interest in cloud computing is growing exponentially. Users are
benefiting from lower cost of ownership, lower supervision cost,
faster decision making and faster time-to-market. Eventually,
cloud computing spending by IT firms is expected to increase
Avnet expects the acquisition to be wrapped up within a month and
to be accretive to earnings with immediate effect. Post
acquisition, Seamless will be combined into Avnet's services
division. We believe that Avnet's growing exposure into the cloud
is likely to fetch more revenues going forward. Earlier this
year, Avnet acquired RTI Holdings Ltd. and TSSLink and solidified
its service portfolio.
Distribution companies usually operate on razor-thin margins.
Therefore, there are only a couple of ways to grow in this
market. One of the most fruitful ways is through accretive
During 2012, the company acquired as many as 13 new units. These
acquisitions are expected to augment the company's product
portfolio and enhance its performance quite comprehensively going
Avnet sees significant competition for both its domestic and
foreign operations. It has an archrival in
Arrow Electronics Inc
)., although other big players such as Anixter International Inc.
and Richardson Electronics Ltd. are also not to be discounted.
Currently, Avnet has a Zacks Rank #3 (Hold).