Technology distribution company, Ingram Micro (IM - Analyst Report) , has added several new vendors, such as Panasonic, Falconstor, Jabra and Whiptail, to Promark’s General Services Administration (GSA) schedule. Incidentally, Ingram had acquired Promark Technology, a value added technology distributor in late 2012.
The Promark acquisition not only strengthened Ingram’s position in the premium products and solutions market, but also helped to strengthen its leadership position among public sector organizations. Leveraging Promark’s GSA and Ingram’s distribution channels technology, companies can market their products globally.
Moreover, Ingram is expected to invest strategically in Promark to make it more affordable and cater to the needs of the tech industry at competitive prices. Recently, networking major, Cisco (CSCO - Analyst Report) , also chose Ingram to market its technology products and solutions. Some of the other vendors include Fusion-io and QLogic (QLGC - Analyst Report) .
Ingram has been gaining from increased orders from Small & Medium Business (SMB) organizations in Europe, particularly in Germany and the U.K. This sector continues to spend on IT even as macroeconomic headwinds continue to impact overall business in Europe. Ingram is now targeting the SMB segment in a more comprehensive way, not just in Europe but across all regions.
Moreover, cost benefits of cloud computing are pushing different companies toward massive information technology restructuring and upgrades. This is one of the reasons that SMBs have been investing in the area despite the weak economic conditions that have led to a slump in overall IT spending. We expect this to continue working in favor of distributors like Ingram. Again, the company’s partners and associates of Promark will offer a vast array of business opportunities that were previously unavailable.
Additionally, we believe that the improving IT spending trend will help Ingram to post better results ahead. Moreover, management’s focus on the high-margin market and strategic acquisitions to grow market share is encouraging.
However, the company’s significant exposure to Europe and its high debt burden are concerns, going forward.
Currently, Ingram has a Zacks Rank #3 (Hold).