Synnex acquires Gates/Arrow

The news Synnex Information Technologies Inc. was acquiring the North American assets ofGates/Arrow Distributing from Arrow Electronics Inc. came as a shock to two resellers

who deal with the Canadian arm of the Fremont, Calif.-based distributor.

Paul Furtado, vice-president of corporate affairs for Audcomp Computer Systems of Hamilton, Ont., said he heard some “”rumblings”” that this deal might happen, but was still amazed that the Gates/Arrow acquisition is now a reality. He says he believes the deal may improve Synnex Canada’s white box offering. According to Furtado, Gates/Arrow carried specific products that other broadline-distributors categorized as a special order.

“”(The Gates/Arrow acquisition) will benefit them,”” he said. “”Synnex learned a lot from its Merisel days and from what happened to Merisel south of the border. Obviously, part of the whole reorganization and the name change is they wanted to sever ties or any conscious link. They will be a little smarter in how they go about tackling and marketing and a perfect example is how we have been doing more business with Synnex than we’ve had in the past two to three years,”” Furtado said.

He added, however, that with Gates/Arrow out of the picture it would mean one less distributor for the reseller community in Canada. Sheldon Waters, president and CEO of Data Systems Marketing of Toronto, was shocked when he heard of the deal. He agrees with Furtado that this deal will make for a less competitive landscape for resellers. “”The access points for resellers are getting tighter and for us it has not been good,”” Waters said.

In the past, Waters would spread out his buying across all the major distributors to improve his cash-flow, but with more consolidation in the industry it is getting harder to manage, he said.

The purchase price was not disclosed as of press time, but it will be a combination of cash and the assumption of stated liabilities. The closing date is expected within 30 to 45 days.

In a prepared statement, Synnex CEO Robert Huang said Synnex and Gates/Arrow are synergistic in product offerings, customer focus and business practices. He added the acquisition renders a natural fit for the two entities. Both Gates/Arrow and Synnex distribution headquarters are located in Greenville, S.C., as well.

“”We expect the integration of the two organizations to be a seamless transition, and we look forward to the Gates/Arrow staff becoming a part of the Synnex distribution team,”” Huang said.

The Gates/Arrow acquisition continues a very busy year for Synnex, which also signed major industry vendors such as Seagate, Creative Labs, Intel, StorCase and Abit.

Synnex Canada also developed a new Product Management division that focuses exclusively on the top 50 vendors in the market place.

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