Tech Data Corp.TECD announced that it will acquire North America's leading data center and professional services provider – Signature Technology Group. The transaction, financial terms of which have been kept under wraps, is likely to close in Jun 2015.
The news was well received by investors as evident from the 2.31% rise in Tech Data shares in yesterday’s trading session.
Signature Technology’s business will be integrated into Tech Data's Advanced Infrastructure Solutions (AIS) division.
The acquisition will strengthen the company’s data center business while broadening its service portfolio. Signature Technology’s capabilities in data center services allow solution providers to maximize their clients’ returns. The company’s services are focused on enhancing efficiency, lowering risks and minimizing costs. Signature Technology has already been certified by 23 original equipment manufacturers (OEMs) and supports more than 0.3 million devices across North America. Moreover, Signature Technology has strong relationships with some of Tech Data's key channel partners and this acquisition will further strengthen the company’s relation with these customers.
This acquisition will boost Tech Data’s position in the IT infrastructure management domain. As per an IDC report, over a period of two years, more than 60% of companies will adopt qualified service partners instead of managing their infrastructure on their own.
The news of the buyout comes just as Tech Data is about to report its first quarter fiscal 2016 financial results. Last quarter, the company posted a negative earnings surprise of 3.45%. This Zacks Rank #3 (Hold) company has delivered positive surprises in two of the trailing four quarters, with an average beat of 10.63%.
Some other stocks that are set to report their quarterly results today include Avago Technologies Limited AVGO, OmniVision Technologies, Inc. OVTI and Splunk, Inc. SPLK.
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