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Technology distribution company, Ingram Micro (IM - Analyst Report) signed a deal last week with ESET, a provider of digital security solutions, for the distribution of ESET’s suite of security products to channel partners in the U.S.

ESET offers a wide range of security solutions that protect the business environment against cyber-attacks and malwares. The company’s product suite includes ESET Endpoint Security, ESET Endpoint Antivirus, ESET NOD32 Antivirus, ESET Smart Security and ESET Cyber Security (solution for Mac). Its network security solutions thwart advanced threats and data breach attempts. We believe that the distribution of these security products in the U.S. will benefit Ingram Micro, thus helping it to expand its market share and increase sales growth.

In today’s technology driven world, cyber-crime has become an area of major concern. Enterprises and government agencies are looking for more stringent cybersecurity measures to plug the loopholes in the system. Ingram Micro is likely to benefit from this increasing demand for security solutions and the expansion in its supply-chain solutions portfolio. On the other hand, ESET will benefit from increased geographical reach through Ingram’s vast distribution network. 

Furthermore, leveraging Ingram Micro’s distribution channels, both the companies will be able to market their products easily and expand in newer markets as well.

Ingram Micro has been teaming up with emerging brands in the mobility space to expand its product and service offerings. The company continues to invest to improve its mobile capabilities in all its operating markets, especially in Canada. It is also worth noting that the strong performance of its mobility business helped Ingram Micro’s first-quarter revenues to improve on a year-over-year basis.

Ingram Micro has been striking distribution deals with a number of original equipment manufacturers, thus expanding its product portfolio. Moreover, the company’s exposure in cloud computing products is expected to drive growth.

We believe that an improving IT spending trend will help Ingram to post better results, going forward. Moreover, the company’s focus on the high-margin market and strategic acquisitions to increase market share are encouraging. The BrightPoint acquisition is also expected to remain a key growth driver for the company.

Though Ingram Micro’s significant European exposure and a high debt burden are concerns, we remain fairly optimistic about the company’s strategic relationships with network giants such as Juniper Networks Inc. (JNPR - Analyst Report), Cisco (CSCO - Analyst Report) and IBM Corp. (IBM - Analyst Report).

Currently, Ingram Micro carries a Zacks Rank #3 (Hold).

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