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"A business that makes nothing but money is a poor business."

-Henry Ford

PCM, Inc. to Acquire Certain Assets of En Pointe Technologies Sales, Inc.

martinwolf Transaction Analysis

Financial Information

  • Total Transaction Size: $15 million, plus 3 year contingent earnout

Transaction Facts

  • PCM, Inc. (NASDAQ:PCMI) announced earlier today that it has entered into an agreement to acquire the assets of En Pointe Technologies Sales, Inc.’s IT solution provider business, excluding certain current tangible assets.
  • PCM, Inc. is a leading technology solution provider with revenues of $1.4 billion for the year ending December 31, 2014.
  • En Pointe, one of the largest independent IT solution providers, had unaudited revenue of $411 million for their trailing twelve months ending December 31, 2014.
  • Once the transaction is closed the En Pointe existing management team will continue to manage the day-to-day business.
  • PCM, Inc expects the transaction to be accretive to earnings starting in the 3rd quarter of 2015.
  • The transaction is expected to close by April 1, 2015.

Acquiring Additional Customers, Services and Capabilities

  • What’s the Big Deal?: This transaction is the largest acquisition ever made by PCM and is expected to provide a number of benefits by boosting PCM’s vendor network and scale. In addition to providing operations benefits such as cost savings and synergies, the transaction adds to PCM’s portfolio of technical skills and offerings, which are particularly critical as vendors are emphasizing services as part of the full solution to their customers.
  • A Space Defined by Consolidation: This transaction continues consolidation trends in the Solution Provider space as changing markets,  technologies, and cloud software and services impact how IT services, products, and software will be brought to market in the continuing changing landscape. Two recent examples of this consolidation include Arrow’s acquisition of immixGroup earlier this month and Millstein Group’s acquisition of DLT Solutions, another SP500 top 50 member.
  • Growing its Gross Margin: En Pointe’s gross margin is higher than that of PCM, as a result of the company’s higher mix of software and solution sales. This transaction will help PCM transition to a higher value-added reseller model.

For more information on this transaction, click here. martinwolf advised En Pointe in this transaction.

 

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