Ingram Micro Expands AIDC/POS Presence by Acquiring the Distribution Business of China's Cantechs Group
June 03 2008 - 12:14PM
PR Newswire (US)
Small yet strategic acquisition will provide platform for further
Asian expansion in growing category SANTA ANA, Calif., June 3
/PRNewswire/ -- Ingram Micro Inc. (NYSE:IM), the world's largest
technology distributor, has gained a greater presence in the Asian
enterprise mobility market by acquiring the distribution business
and certain assets of the Cantechs Group, one of China's largest
providers of auto-identification and data capture/point of sale
(AIDC/POS) products and services. The purchase price and other
terms of the cash transaction, which closed late last week, were
not disclosed. The Cantechs Group, established in 1988, is one of
the top three AIDC/POS distributors in China. It provides bar-code
scanners, radio-frequency identification devices, printers and
other products produced by leading manufacturers in the data
capture and point-of-sale segments, such as IBM, Metrologic, Symbol
and Zebra. Headquartered in Beijing, the company has sales and
service operations in 20 Chinese cities, serving customers in a
variety of industries, including retail, logistics and
manufacturing. "This is a small, yet strategic acquisition that
provides an excellent platform to expand AIDC/POS through China and
other parts of Asia," said Shailendra Gupta, president, Ingram
Micro Asia-Pacific. "AIDC/POS is a segment with great opportunities
in Asia, generating better margins than more common information
technology products. By acquiring the Cantechs distribution unit,
Ingram Micro is gaining a solid presence in this category within
the large, growing Chinese market. The Cantechs distribution
business is profitable and growing, with a talented management team
and valuable relationships with key vendors and customers. We look
forward to working with this team and its partners to further our
collective growth and success." Andrew Tay, vice president and
general manager of Asia Pacific, Zebra, said that he looks forward
to a solid relationship with Ingram Micro. "Ingram Micro is the
only broad-based technology distributor with proven expertise in
AIDC/POS," he said. "Zebra and Ingram Micro have established a
successful partnership in North America, Europe and India, and
we're looking forward to expanding this relationship into China.
We're confident that, through this acquisition, Ingram Micro will
help us build a robust market for Zebra's products and services
throughout Hong Kong and China." Gupta added that the Cantechs
business will integrate into the China operations of Ingram Micro
Asia-Pacific as a stand-alone unit responsible for AIDC/POS sales,
marketing and vendor and category management. The unit will be able
to leverage the existing distribution infrastructure and larger
customer base of Ingram Micro China. "We're pleased to forge this
partnership with Ingram Micro," said Maggie Wei, general manager of
the Cantechs distribution business. "Ingram Micro understands our
business and the unique needs of our employees, vendors and
customers. We're confident that we will maintain excellent customer
and vendor service through this transition. We look forward to
gaining access to Ingram Micro's breadth of expertise and financial
strength." Cautionary Statement for the Purpose of the Safe Harbor
Provisions of the Private Securities Litigation Reform Act of 1995
The matters in this press release that are forward-looking
statements, including but not limited to statements about future
revenues, sales levels, operating income, margins, stock-based
compensation expense, integration costs, cost synergies, operating
efficiencies, profitability, market share and rates of return, are
based on current management expectations that involve certain risks
which, if realized, in whole or in part, could cause such
expectations to fail to be achieved and have a material adverse
effect on Ingram Micro's business, financial condition and results
of operations, including, without limitation: (1) intense
competition, regionally and internationally, including competition
from alternative business models, such as manufacturer-to-end-user
selling, which may lead to reduced prices, lower sales or reduced
sales growth, lower gross margins, extended payment terms with
customers, increased capital investment and interest costs, bad
debt risks and product supply shortages; (2) integration of our
acquired businesses and similar transactions involve various risks
and difficulties -- our operations may be adversely impacted by an
acquisition that (i) is not suited for us, (ii) is improperly
executed, or (iii) substantially increases our debt; (3) foreign
exchange rate fluctuations, devaluation of a foreign currency,
adverse governmental controls or actions, political or economic
instability, or disruption of a foreign market, and other related
risks of our international operations may adversely impact our
operations in that country or globally; (4) we may not achieve the
objectives of our process improvement efforts or be able to
adequately adjust our cost structure in a timely fashion to remain
competitive, which may cause our profitability to suffer; (5) our
failure to attract new sources of profitable business from
expansion of products or services or risks associated with entry
into new markets, including geographies, products and services,
could negatively impact our future operating results; (6) an
interruption or failure of or disruptions due to changes to our
information systems or subversion of access or other system
controls may result in a significant loss of business, assets, or
competitive information and may adversely impact our results of
operations; (7) if there is a downturn in economic conditions for
an extended period of time, it will likely have an adverse impact
on our business; (8) significant changes in supplier terms, such as
higher thresholds on sales volume before distributors may qualify
for discounts and/or rebates, the overall reduction in the amount
of incentives available, reduction or termination of price
protection, return levels, or other inventory management programs,
or reductions in payment terms, may adversely impact our results of
operations or financial condition; (9) termination of a supply or
services agreement with a major supplier or product supply
shortages may adversely impact our results of operations; (10)
changes in, or interpretations of, tax rules and regulations may
adversely affect our effective tax rates or we may be required to
pay additional tax assessments; (11) we cannot predict with
certainty, the outcome of the SEC and U.S. Attorney's inquiries or
assessments by Brazilian taxing authorities; (12) we may experience
loss of business from one or more significant customers, and an
increased risk of credit loss as a result of reseller customers'
businesses being negatively impacted by dramatic changes in the
information technology products and services industry as well as
intense competition among resellers -- increased losses, if any,
may not be covered by credit insurance or we may not be able to
obtain credit insurance at reasonable rates or at all; (13) rapid
product improvement and technological change resulting in inventory
obsolescence or changes in demand may result in a decline in value
of a portion of our inventory; (14) future terrorist or military
actions could result in disruption to our operations or loss of
assets, in certain markets or globally; (15) the loss of a key
executive officer or other key employees, or changes affecting the
work force such as government regulations, collective bargaining
agreements or the limited availability of qualified personnel,
could disrupt operations or increase our cost structure; (16)
changes in our credit rating or other market factors may increase
our interest expense or other costs of capital, or capital may not
be available to us on acceptable terms to fund our working capital
needs; (17) our failure to adequately adapt to industry changes and
to manage potential growth and/or contractions could negatively
impact our future operating results; (18) future periodic
assessments required by current or new accounting standards such as
those relating to long-lived assets, goodwill and other intangible
assets and expensing of stock options may result in additional
non-cash charges; (19) seasonal variations in the demand for
products and services, as well as the introduction of new products,
may cause variations in our quarterly results; and (20) the failure
of certain shipping companies to deliver product to us, or from us
to our customers, may adversely impact our results of operations.
Ingram Micro has instituted in the past and continues to institute
changes to its strategies, operations and processes to address
these risk factors and to mitigate their impact on Ingram Micro's
results of operations and financial condition. However, no
assurances can be given that Ingram Micro will be successful in
these efforts. For a further discussion of significant factors to
consider in connection with forward-looking statements concerning
Ingram Micro, reference is made to Item 1A Risk Factors of Ingram
Micro's Annual Report on Form 10-K for the year ended December 29,
2007; other risks or uncertainties may be detailed from time to
time in Ingram Micro's future SEC filings. Ingram Micro disclaims
any duty to update any forward-looking statements. About the Ingram
Micro Data Capture/POS Division The Ingram Micro Data Capture/POS
Division is a leading value-added distributor of auto ID/data
capture (AIDC), point-of-sale (POS), radio frequency identification
(RFID) and wireless solution products and services. In addition to
these technologies, the division also offers partners access to the
complete suite of Ingram Micro products and services. With offices
and distribution centers across North America, Latin America,
Europe and Asia, the Ingram Micro Data Capture/POS division
delivers a comprehensive portfolio of products and services to
technology integrators around the world. For more information,
visit http://www.ingrammicro-dcpos.com/. About Ingram Micro Inc. As
a vital link in the technology value chain, Ingram Micro creates
sales and profitability opportunities for vendors and resellers
through unique marketing programs, outsourced logistics services,
technical support, financial services, and product aggregation and
distribution. The company serves more than 150 countries and is the
only global broad-based IT distributor with operations in Asia.
Visit http://www.ingrammicro.com/. (C) 2008 Ingram Micro Inc. All
rights reserved. Ingram Micro and the registered Ingram Micro logo
are trademarks used under license by Ingram Micro Inc. DATASOURCE:
Ingram Micro Inc. CONTACT: Investors, Ria Marie Carlson,
+1-714-382-4400, , or Kay Leyba, +1-714-382-4175, , or Media, Marie
Connell, +1-714-382-2009, , or Kevin Chen, +65 6511-2808, , all of
Ingram Micro Inc. Web site: http://www.ingrammicro.com/
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