Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Arrow Electronics (ARW - Analyst Report) has agreed to acquire Munich-based Computerlinks for $300 million. The acquisition, expected to close in the fourth quarter of the current fiscal year, will add approximately 20 cents to 25 cents (excluding the impact of amortization of related intangible assets) to Arrow’s earnings per share for the year.

Computerlinks, a distributor of value-added IT services and solutions, has operations all over the world. The company provides IT security and Internet Technology solutions and services to hardware and software manufacturers. Furthermore, the company has been expanding into cloud-based services. The acquisition is expected to synergize with Arrow’s value-added services portfolio.

Arrow Electronics provides a wide range of value-added services to help customers reduce their time to market, lower their total cost of ownership, introduce innovative products through demand creation opportunities and enhance their overall competitiveness.

The acquisition would also help Arrow gain traction in the emerging data center market. Additionally, the product portfolio of Computerlinks will enhance Arrows Enterprise computing solutions (ECS) offerings. Arrow’s ECS has partnerships with many companies such as Check Point (CHKP - Analyst Report), Juniper (JNPR - Analyst Report) and International Business Machines (IBM - Analyst Report), which provides varied products and services related to security and networking to its clients.

Arrow has been very active on the acquisition front, having purchased seven companies in 2012 alone. These acquisitions were intended to enable Arrow to enter new markets, diversify and broaden its product portfolio and maintain its leading position in the world. Moreover, the company’s continued acquisitions are expected to be a robust contributor to its revenue stream, going forward.

Moreover, the company’s prospects are dependent on IT spending. As per the U.S. research firm Gartner, overall IT spending is expected to grow 4.1% in 2013. The improvement in spending will be mostly driven by enterprise software and IT services.

Arrow’s Global Enterprise Computing Solutions segment deals in the enterprise software and IT services areas and generates roughly 50.0% of the company’s annual billings. Thus, the acquisition should bode well for the company.

Its positive commentary about enhanced productivity, annual cost savings and successful ERP implementation across Europe is encouraging. We believe that Arrow could get better contribution from Europe after the ERP program becomes operational.

Currently, Arrow has a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
BITAUTO HOLD BITA 33.49 +8.84%
VALEO SA SPO VLEEY 68.09 +4.22%
DIXIE GROUP DXYN 14.64 +4.13%
INTERNATIONA ICAGY 32.67 +3.39%
CANADIAN SOL CSIQ 26.01 +3.34%