Analysts Praise Synnex NAE BuyBy Sara Driscoll | Posted 2008-02-29 Email Print
Synnex's recent acquisition of New Age Electronics (NAE) has been welcomed by analysts as a good way for the firm to diversify.
Analysts have applauded the move by distributor Synnex to push further into the retail and consumer space by acquiring New Age Electronics (NAE)
The deal, for $54.25 million in cash, will give Synnex all of the assets of NAE, which distributes IT and consumer electronics to the retail sector. NAE’s revenues were in excess of $900 million and the firm has a relationship with HP, which accounts for approximately 89 percent of NAE’s fiscal 2007 revenue.
Brian Alexander, managing director of Equity Research: Technology Hardware/Distribution/EMS at Raymond James & Associates, said the acquisition significantly expands Synnex's footprint in the consumer electronics space. "[The deal] adds new customer relationships and additional products from manufacturers such as HP, Panasonic, Sharp, Kodak and Samsung," he said in a statement.
Alexander said the move would also fit in well with Synnex’s dedicated consumer electronics division NEXCE, which it opened in September 2006 and its acquisition of consumer electronics distributor Redmond Group of Companies in May last year.
"The acquisition is another example of Synnex's diversification strategy. Over the past two years, Synnex has invested more than $265 million in acquisitions that are either tangentially related or unrelated to IT product distribution," he added.