Avnet Tech buys Ontrack
In an indication of the attractiveness of the domestic market, the $15-billion global distributor of technology solutions and electronic components, Avnet, has acquired domestic systems intergrator Ontrack Solutions for an undisclosed amount.
MUMBAI: It���s not uncommon for IT companies in India to acquire firms in the US or the UK to get access to clients and improve their marketshare. But in an indication of the attractiveness of the domestic market, the $15-billion global distributor of technology solutions and electronic components, Avnet, has acquired domestic systems intergrator Ontrack Solutions for an undisclosed amount.
Ontrack, a 15-year-old firm founded by Naresh Desai and G Balakrishnan, has no venture captial or PE investment.
���Ontrack���s revenue was approximately $13 million. Avnet will leverage Ontrack���s existing business and capabilities to build value-added solutions distribution business throughout India. The transaction is expected to be immediately accretive to earnings and supports Avnet���s long-term return on capital goals,��� said Avnet Technology Solutions president KP Tang. Ontrack is a distributor for players such as IBM, Hewlett Packard, Citrix and VMware.
Ontrack founder-director G Balakrishnan said that while there were many firms that merely sold technologies and were ���box-pushers���, there were some that could actually deploy and implement them. ���Most of our profits come from the services we provide. For instance, if you sell a software from Citrix, you also need to deploy it, but not everybody has that capability,��� he said.
While Avent���s operating margins as a distributor of electronic components and technology solutions, is in single-digits, a good systems integrator in the Indian market can enjoy double-digit operating margins. However, Ontrack, a privately-held company, did not disclose its margins or profits.
Mr Balakrishnan and Mr Desai will continue with Avnet after the acquisition, leading the local India team, Mr Tang said. The entity will become part of the operations of Avnet Technology Solutions Asia Pacific.
Ontrack, a 15-year-old firm founded by Naresh Desai and G Balakrishnan, has no venture captial or PE investment.
���Ontrack���s revenue was approximately $13 million. Avnet will leverage Ontrack���s existing business and capabilities to build value-added solutions distribution business throughout India. The transaction is expected to be immediately accretive to earnings and supports Avnet���s long-term return on capital goals,��� said Avnet Technology Solutions president KP Tang. Ontrack is a distributor for players such as IBM, Hewlett Packard, Citrix and VMware.
Ontrack founder-director G Balakrishnan said that while there were many firms that merely sold technologies and were ���box-pushers���, there were some that could actually deploy and implement them. ���Most of our profits come from the services we provide. For instance, if you sell a software from Citrix, you also need to deploy it, but not everybody has that capability,��� he said.
While Avent���s operating margins as a distributor of electronic components and technology solutions, is in single-digits, a good systems integrator in the Indian market can enjoy double-digit operating margins. However, Ontrack, a privately-held company, did not disclose its margins or profits.
Mr Balakrishnan and Mr Desai will continue with Avnet after the acquisition, leading the local India team, Mr Tang said. The entity will become part of the operations of Avnet Technology Solutions Asia Pacific.
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