Arrow Makes Deal with Brocade

Leading electronic parts distributor Arrow Electronics Inc. (ARW - Analyst Report) entered into a North American agreement with Brocade to distribute Internet Protocol (IP) solutions. The financial details of the transaction were not disclosed.

Under the agreement, Arrow’s business segment Enterprise Computing Solutions  will distribute IP solutions to resellers that are not procuring this product portfolio through another distributor or have previously purchased them directly from Brocade.

Additionally, the company will also help the resellers identify customers seeking end-to-end networking solutions and sell Brocade IP solutions into new markets by providing intensive training, sales and marketing support.

With the addition of Brocade’s IP networking solutions, the company will be better positioned to help resellers and capitalize on data-center convergence.

Arrow Electronics recently signed another distribution agreement with Exosite, a machine-to-machine (M2M) application and cloud computing software company. The agreement enables Arrow customers with Exosite’s cloud-based data platform for M2M applications, facilitating data acquisition, back-haul and storage capabilities and monitors and manages connected devices.

The company also entered into a global distribution agreement deal with Samsung Electro-Mechanics. Arrow will provide distribution and design-in services for Samsung Electro-Mechanics on a worldwide basis, excluding Korea. The distribution agreement includes Samsung's broad product offering in the areas of capacitors, resistors, inductors and crystals.

Earlier, Arrow had completed the acquisition of RF, Wireless and Power Division of Richardson Electronics Ltd. (RELL - Snapshot Report) for $210 million. This acquisition will allow Arrow to expand its portfolio of value-added services with a global presence in the wireless and power conversion markets, having superior growth exposure to the Asia-Pacific market. Further, the transaction is expected to increase earnings by 10 to 20 cents per share in the first full year of operations.

Arrow Electronics plans to grow with the help of small and disciplined acquisitions. Electronic components and computer products distribution is a low-margin business and Arrow being a player in this particular market, heavily depends on acquisitions.

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