Acquisition is one of the key strategies followed by Ingram Micro Inc. IM to enhance its geographical reach, product portfolio and supply chain capabilities. Recently, the company signed a definitive agreement to acquire two e-Commerce fulfillment businesses – DOCdata Nederland B.V. and DOCdata International B.V. (“Docdata”) – from the publically traded company, DOCDATA N.V., based in the Netherlands.
According to Ingram Micro, “Docdata is one of the leading European providers of order fulfillment, returns logistics and online payment services, providing critical commerce solutions to major retailers, brands and promising start-ups. Docdata currently handles between 125,000 and 250,000 orders on a daily basis, with major operations in Germany, Netherlands and the United Kingdom.”
The deal, subject to customary regulatory approval, is valued at approximately $175 million and expected to be accretive to Ingram Micro’s 2016 revenues and non-GAAP earnings per share (EPS). The company expects the acquisition to contribute more than $150 million to annual revenues and 5 cents to 7 cents to non-GAAP EPS.
Post acquisition, Docdata will operate as a wholly owned subsidiary of Ingram Micro.
Ingram Micro has gained a strong foothold in the mid-range enterprise market through various strategic acquisitions. Some of the significant ones are Anovo, Brightpoint, Aptec Holdings, Promark Technology, SoftCom, CloudBlue and Shipwire.
These buyouts have expanded the company’s presence in the high-margin products and services market including fee-for-service mobility device lifecycle solutions, traditional logistics solutions and cloud-based solutions. We believe that these takeovers have enabled the company to garner additional revenues.
However, the technology distributor is currently facing some headwinds. While its services business is seeing solid growth, the company remains largely dependent on the PC market where shipments are sluggish. Gartner Inc.’s IT latest forecast of a 7.3% drop in PC shipments in 2015 — worse than the earlier forecast of 4.5% decline — paints a rather gloomy picture.
Currently, Ingram Micro carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the broader technology sector are Tech Data Corp. TECD and PCM Inc. PCMI. Which Tech Data sports a Zacks Rank #1 (Strong Buy), PCM carries a Zacks Rank #2 (Buy).
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