Combined company will generate more than $9 billion in sales, putting it on par with rivals CDW and SHI
Insight Enterprises is acquiring PCM for $581 million to create a massive national account reseller with annual sales greater than $9 billion. The new powerhouse organization will have the resources to better compete with rivals such as CDW and SHI.
The Lowdown: Insight and PCM are already among the large national account resellers — or, as some still call this class of partner, direct market resellers. Insight says the deal will help it accelerate market share growth and penetrate new customer segments.
The Details: With its combined resources, the new entity can help customers grow their businesses, undertake business transformation programs, implement better security, and achieve higher levels of mobility and productivity, Insight says.
The Impact: A larger Insight will make it a more formidable competitor against market leaders CDW and SHI. Likewise, the consolidation will put pressure on midsize and small resellers that are already at a disadvantage on price. And the merger could put pressure on vendors that lend on national resellers to amend their go-to-market strategies.
Background: National account and direct market resellers are growing substantially as vendors have directed more of their investments among this class of partners with proven sales capacity. Earlier this year, SHI announced it passed $10 billion in revenue for the first time.
The Buzz: “Over the past five years, Insight has made significant progress, transforming our business from a value-added reseller to a well-respected global solutions provider with deep expertise across technology areas that provide our clients with significant value,” said Ken Lamneck, CEO of Insight. “Together with PCM, we will be even better positioned to capitalize on our solution area investments through the addition of more technical and sales resources and access to thousands of new clients, especially in the midmarket and corporate client segments.”
“This combination offers the ability to provide clients with greater value through the expansive solution offerings of the combined company at a time when customers increasingly need a full-service technology solution provider to help them transform for the future,” said Frank Khulusi, chairman and CEO of PCM. “Together, we will be able to offer an impressive level of breadth, scale, partnerships, and services to meet our clients’ needs and exceed their expectations.”
“Insight has a disciplined operating model for evaluating acquisitions and efficiently integrating these businesses post-closing, which has allowed us to deliver well on the financial commitments of acquisitions we have made in the past few years,” said Glynis Bryan, CFO of Insight. “As we move towards the closing and integration of PCM, we expect to deploy these same best practices to deliver the expected synergies in our financial results. We believe this transaction will contribute materially to shareholder value as we execute our plans.”