28 November 2005
Logicalis Group announces plans to acquire Avnet's US HP enterprise end-user business
Concludes multi-year exclusive distribution agreement for both HP and IBM solutions in new strategic partnership in the US
Logicalis Group announced today plans for Logicalis Inc, Logicalis Group's wholly owned subsidiary in the United States, to acquire the US-based HP enterprise end-user business unit of Avnet Inc (AVT). The US-based HP enterprise end-user business unit had revenues in the last financial year of $100 million. In addition, Logicalis Inc has also agreed a multi-year exclusive distribution agreement with Avnet for Logicalis to accelerate its growth in the delivery of HP and IBM enterprise solutions.
Strengthens HP and IBM relationships
"This announcement is part of Logicalis Group's continuing global strategy where expansion is achieved through both organic growth and acquisition," says Jens Montanana, CEO Logicalis Group. "Today's announcement further strengthens Logicalis' strategic partnerships with HP and IBM."
Over the past year, Logicalis has acquired two IBM Premier Business Partners in the US - Solution Technology and Eisco. Meanwhile, in the UK, it has made three similar acquisitions – Hawke Systems, an HP Storage Elite Partner, and two IBM Premier Partners, Notability Solutions and TBC.
Acquisition of the Avnet's US-based HP enterprise end-user business
The Avnet US-based HP enterprise end-user business is an HP Premier Partner with the majority of revenue generated in two geographic regions – Southwest and Central USA. The business has some 700 end-user customers and is focused on HP's Intel and Alpha server, and storage solutions. The Avnet employees dedicated to this business unit will become employees of Logicalis Inc following the completion of the acquisition.
"The acquisition of Avnet's HP enterprise end user business is another step in building a bigger and more robust business, but particularly it will enhance our leadership position in the HP arena and particularly strengthen our ability to deliver and integrate high-performance HP technology solutions for our customers in the U.S.," adds Mike Cox, President and CEO, Logicalis North American operations. "We are looking forward to welcoming the dedicated Avnet employees and the long term customer relationships they will bring with them into the Group."
"Logicalis is exactly what we were looking for in a leading, growing business partner to continue serving the customers that have been so important to us," said Steve Tepedino, President Avnet Technology Solutions, Americas. "We wanted a company that would provide a seamless transition and that has a similar culture and business strategy. With its existing strong HP relationships stemming from its HP Platinum Partner designation, Logicalis will certainly deliver the level of service Avnet's customers have come to expect over the last 20 years. Our customers will also benefit from the expertise, services, and broader product line Logicalis can offer including managed services, contract consulting, security services, IP communications and application development. This agreement allows Avnet to focus its efforts on enabling its partners to better serve their customers' enterprise IT requirements."
On completion of this purchase Logicalis Inc's annualized revenues will exceed $450 million. It is anticipated the acquisition will complete in January 2006.
Strategic relationship with Avnet in the US
Logicalis Inc has also chosen Avnet to be its exclusive US distribution partner for its HP and IBM enterprise solutions. This multi-year agreement will allow Logicalis to focus on delivering solutions to its clients and to benefit from more efficient fulfilment through Avnet's investment in taking cost out of the supply chain and in enabling faster-than-market growth for its partners.
"Our distribution relationships have been central to Logicalis' success over the years, and that includes existing business with Avnet. We are now very excited about our enhanced relationship," adds Cox. "Partner tools such as ChannelConnection, Avnet's partner portal, provide insight to our business allowing us to put focus on customer-facing services and support. Avnet's suite of business development programs will allow us to make sales and technical investments that can immediately generate incremental revenue for Logicalis. It's a win-win situation."
About Logicalis
Logicalis is an international provider of high-performance IT integration solutions. The Logicalis Group employs 1,000 people worldwide, including highly-trained service specialists who specify, design, deploy and manage IT infrastructure to meet the needs of over 5,000 corporate and public sector customers. Logicalis maintains strong partnerships with technology leaders such as IBM, HP and Cisco.
The Logicalis Group is a division of Datatec Limited (DTCJ.J), a $3 billion business listed on the Johannesburg Stock Exchange. With its international headquarters in the UK, Logicalis will have annualized global revenues of approximately $700 million from operations in the U.S., UK, Germany, and South America. For more information, visit www.logicalis.com.