Insight Enterprises, a provider of IT products and services, has been building out its offerings in recent years to help companies through digital transformation projects. It took a major step to boost those offerings by completing its acquisition of PCM Inc., a provider of IT products and services sold through ecommerce sites and sales and services teams, Insight Enterprises announced Friday.
Insight is paying about $581 million to acquire PCM and absorb its debt. PCM, formerly known as PC Mall, will add significantly to Insight’s revenue, profits and market footprint, Ken Lamneck, Insight’s president and CEO, said earlier this month on a second-quarter earnings conference call with investment analysts. PCM operates PCMall.com, MacMall.com and TigerDirect.com as online sellers of IT products and services to businesses and consumers.
“We expect that PCM will add more than $2 billion in our top line” and “more than 15%” to gross profit margins, Lamneck said on the call, according to a transcript from Seeking Alpha.
Expanding in the mid-market
In addition, PCM will expand Insight’s reach with mid-market companies, particularly in North America, and add “more than $24 million annually in services sales” and “more than 2,700 client-facing teammates,” he said.
Lamneck also suggested that Insight will be able to quickly integrate PCM’s operations into Insight’s, including the latter’s ecommerce systems, digital marketing, logistics, and procurement processes.
“We’ve always had strong procurement options for our enterprise clients, both through our traditional business over the last 30 years and as we have expanded our offerings on Insight.com,” Lamneck said in response to questions from B2BecNews. “With PCM’s strength in the mid-market, we now have an expanded opportunity to be the same single-source partner for these clients to help them run smarter. Additionally, PCM’s strength in serving the small-business market, particularly through its TigerDirect business, gives us new platforms to meet the high-velocity buying needs of our SMB clients while giving them easier access to high-quality IT products.”
“The acquisition presents an opportunity for us to expand the number of clients overall using our e-commerce platforms,” he added. “In addition to growing our reach into the small and mid-market business sectors, we’ll be adding a number of PCM clients who already are highly configured for e-commerce transactions and offering them our more complex and service-led intelligent technology solutions for digital innovation, data platform modernization and a more connected workforce.”
As Insight and PCM work together from their own market vantage points—PCM’s strength in serving mid-market companies and Insight’s experience with enterprise systems—Lamneck said, they will “build off our collective strengths and bring an abundance of talent and fresh eyes to our ecommerce platform.”
PCM reported net sales of $548.3 million for the second quarter ended June 30, up less than 1% from a year earlier. For the same period, Insight said its net sales fell by less than 1% to $1.836 billion.
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