Electronic parts distributor Avnet, Inc (AVT - Analyst Report) recently expanded its global distribution agreement with SMART Storage Systems.
SMART Storage Systems is an innovative and rapidly emerging SSD technology provider. Under the expanded agreement, Avnet Memec and Avnet Embedded will now distribute SMART Storage Systems' Xceed solid-state drive (SSD) product lines to its customers on a worldwide basis
Management stated that the expanded agreement with SMART Storage Systems will not only broaden the company’s product portfolio but address the multiple needs of the customers efficiently.
Earlier, Avnet acquired Canvas Systems, which provides IT hardware and services.
Founded in 1998, Canvas Systems specializes in providing services that span the IT lifecycle. These services include remarketing, refurbishment and environmentally compliant asset disposal services.
The services provided by the company enable customers to refresh their data center infrastructure along with reducing costs and minimizing risks.
Canvas Systems generated revenue of approximately $122 million in 2011. This acquisition will be integrated into the operations of Avnet Technology Solutions and will be immediately accretive to the bottom-line.
Last month, Avnet, which competes with Arrow Electronics (ARW - Analyst Report) , completed its acquisition of Pinnacle Data Systems Inc. (PDSi). PDSi provides application-specific hardware and global support solutions for the world’s largest Original Equipment Manufacturers (OEMs).
PDSi generated revenues of approximately $29 million and the acquisition is expected to be immediately accretive to earnings, supporting Avnet's return on capital target of 12.5%.
Once integrated, PDSi will become a part of Avnet Integrated Resources, which provides reverse logistics and after-market services to the global technology industry.
The acquisition is another step in the company’s strategy to offer a new after-market services business, which focuses on repair, refurbishment, recycling and responsible disposition of IT products.
We continue to maintain a Neutral recommendation on Avnet Inc. However, we have a Zacks #2 Rank on the stock, which translates into a short-term Buy rating.