Ingram Micro makes Aptec move
by Stuart Wilson, Monday 13 August 2012
Distribution giant Ingram Micro has made its move in the Middle East and North Africa (MENA) region, striking a deal to acquire ‘certain IT businesses’ of Dubai-based Aptec Holdings for an undisclosed sum. The acquisition is expected to contribute US$250m a year to Ingram Micro’s top line and the deal is due to close by the end of the third quarter 2012. Dr. Ali Baghdadi, founder and CEO of Aptec, will lead the acquired operations reporting to Shailendra Gupta, senior executive VP and president at Ingram Micro Asia-Pacific.
"The acquisition of Aptec fits well with our strategic objectives to continue to build our higher margin specialty businesses while broadening our geographic reach to capitalise on higher growth markets," said Alain Monié, president and CEO at Ingram Micro.
"The Middle East and Africa are robust and growing markets with total IT spending projected to reach US$80 billion by 2015. Aptec has been highly effective in growing their business and enhancing profitability in these emerging markets and we believe this combination will further accelerate these ongoing objectives. Aptec has a long-tenured, accomplished leadership team and we look forward to joining forces with them," Monié added.
Aptec operates as a VAD in the Middle East, Turkey and North Africa, with products and solutions covering data centre, storage, security, networking, and software categories, including technical services. Aptec currently operates in 6 countries: UAE, Kuwait, Oman, Egypt, Lebanon, Pakistan and Turkey. The distributor has 350 staff and serves a channel customer base comprising 3,800 active resellers.
"We are excited to join with Ingram Micro," said Baghdadi. "For more than 30 years Aptec has focused on building the company through innovation, value-added service and an unwavering commitment to our customers and vendor partners. The combined strength of Aptec in the Middle East and North Africa and the global leadership and strategic vendor and customer relationships of Ingram Micro provide an excellent opportunity for expanded reach into new services, products and geographies and we expect the union to offer even more value to our combined community."
CE ANALYSIS: It will be interesting to see what the ’certain IT businesses’ are that Ingram Micro has picked up through this deal. Note that Aptec Holdings revenues hit US$395m in 2010 and US$431m in 2011 according to data submitted for the annual Channel Middle East Power List. Given that Ingram Micro expects US$250m in sales from its MENA acquisition, it seems likely that some parts of Aptec’s operation are not included.
Note also that prior to this deal, Dubai International Financial Centre (DIFC) Investments remained the majority stakeholder in Aptec with a 60% stake according to DIFC documents published earlier this year.
Finally, it is worth remembering that Aptec’s transformation into a strong regional VAD started way back in 2007 when it picked up assets from Tech Data after the distribution giant decided to call it a day in the Middle East. Tech Data decided to leave the region after an in-depth assessment of the potential for the Middle East operation to contribute to its profitability and long-term goals.
Five years down the line and Ingram Micro has a different view. It will be interesting to see if this deal reawakens Tech Data’s dormant interest in the region’s growth potential.