Expands global footprint and penetration into attractive end markets. Accelerates market share growth across Insight’s solution areas. Substantial run-rate operating synergies of $70 million.
TEMPE, Ariz. & EL SEGUNDO, Calif.–(BUSINESS WIRE)–Insight Enterprises (Nasdaq: NSIT), the global provider of Insight Intelligent Technology Solutions™ for organizations of all sizes, (“Insight”), and PCM, Inc. (Nasdaq: PCMI), a provider of IT products and services (“PCM”), have entered into an agreement under which Insight will acquire PCM for $35 per share, representing a 36% premium to its 1-month average closing share price as of Friday, June 21, 2019. The transaction implies an enterprise value of approximately $581 million (including cash and debt acquired).
PCM, based in El Segundo, California, is a provider of multi-vendor technology offerings, including hardware, software and services to small, mid-sized and corporate/enterprise commercial clients, state, local and federal governments and educational institutions across the United States, Canada and the United Kingdom. PCM has offices in 40 locations across these geographies and has more than 4,000 teammates, including more than 2,700 client-facing teammates in sales, technical and service delivery roles.
“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. 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 mid-market and corporate client segments,” said Ken Lamneck, CEO of Insight.
The combination of the two organizations extends Insight’s reach into areas where clients need help most: positioning their businesses for future growth, transforming and securing their data platforms, creating modern and mobile experiences for their workforce and optimizing the procurement of technology. Together, the combined organization will be able to offer partners an even stronger salesforce globally, with increased footprints in North America and the United Kingdom.
“The acquisition of PCM accelerates our opportunity to grow share within our four solution areas: Supply Chain Optimization, Connected Workforce, Cloud + Data Center Transformation and Digital Innovation. The addition of PCM complements our Supply Chain Optimization business, adding scale and clients in the mid-market and corporate space in North America. PCM’s services offerings add scale and capabilities to our Connected Workforce and Cloud + Data Center Transformation solution areas and support our strategy to grow our solutions business,” said Steve Dodenhoff, president of Insight’s North America business.[
“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 solutions provider to help them transform for the future. 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. On behalf of our Board of Directors, we are very pleased to announce this combination which we believe maximizes our shareholders’ value, and we look forward to the resulting opportunities that lie ahead for our employees, customers and vendor partners,” said Frank Khulusi, chairman and CEO of PCM.
Insight expects to realize annual run-rate cost synergies of approximately $70 million by the end of 2021, with more than 50 percent of this to be realized in the first twelve to eighteen months, primarily related to the consolidation of IT and delivery systems, and real estate and operational integration.
“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. 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,” stated Glynis Bryan, chief financial officer of Insight. “We believe this transaction will contribute materially to shareholder value as we execute our plans.”
Insight expects the acquisition to add more than $0.70 to Adjusted earnings per share in 2020, excluding:
- approximately $25 million in transaction-related costs and restructuring expenses, most of which will be incurred in 2019, and
- intangibles amortization expense.
Today, every business is a technology business. Insight Enterprises Inc. empowers organizations of all sizes with Insight Intelligent Technology Solutions™ and services to maximize the business value of IT. As a Fortune 500-ranked global provider of Digital Innovation, Cloud + Data Center Transformation, Connected Workforce, and Supply Chain Optimization solutions and services, we help clients successfully manage their IT today while transforming for tomorrow. From IT strategy and design to implementation and management, our 7,400+ employees help clients innovate and optimize their operations to run business smarter. Discover more at www.insight.com. NSIT
PCM, through its wholly-owned subsidiaries, is a leading multi-vendor provider of technology solutions, including hardware, software and services to small, medium and enterprise businesses, state, local and federal governments and educational institutions across the United States, Canada and the UK. PCM generated net sales of approximately $2.2 billion in the twelve months ended March 31, 2019.
Insight Enterprises, Inc.
Glynis Bryan, 480-333-3251
Helen Johnson, 480-333-3234
Brandon LaVerne, (310) 225-5080
Amy Protexter, 480-409-6710
Sloane & Company
Ariel Kouvaras, 212-446-1884