Channel Blockbuster: Insight Acquires PCM
Under the terms of the deal, Insight will acquire PCM for $35 per share- a 36 percent premium to its one month average closing share price as of last Friday.
Insight has acquired PCM in a $581 million blockbuster deal that reshapes the channel landscape and creates a new $9 billion solution provider powerhouse.
The deal combines Tempe, Arizona-based Insight, No. 14 on the CRN SP500, with El Segundo, Calif.-based PCM, No. 30 on the CRN SP500.
The deal gives Insight an additional 40 locations across three geographies and 4,000 employees including more than 2,700 client-facing employees in sales, technical and service delivery roles. The deal puts Insight at No. 11 on the CRN SP500, just behind SHI.
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Insight CEO Ken Lamneck said the PCM acquisition helps further transform Insight from a value added reseller to a well respected global solutions provider.
“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 Lamneck.
Under the terms of the deal, Insight will acquire PCM for $35 per share- a 36 percent premium to its one month average closing share price as of Friday, June 21, 2019.
Under Lamneck's leadership, Insight has been transformed from a product focused reseller into an IT services powerhouse delivering breakthrough solutions in the hottest markets including Internet of Things.
That services charge has taken the Phoenix, Arizona-headquartered global systems integrator from $4.1 billion in sales when Lamneck took over as CEO to a more than $7 billion company with a robust services portfolio.
Lamneck has built out the company's services portfolio -- which is growing at a 23 percent clip -- through a combination of acquisitions and organic investment in talent development. Insight was just recognized by market researcher Gartner for the third consecutive year in Gartner's 2019 Magic Quadrant for Managed Workplace Services North America.
The biggest change is the addition of a 1,000 strong software development/solution architect team. There was literally no software developers at Insight when Lamneck, a 27 year tech industry veteran took the CEO job.
Bob Venero, CEO of Holbrook, N.Y.-based solution provider Future Tech, No. 101 on the CRN SP500, said he sees the consolidation as invevitable for publically held SP500 companies trying to beat the quarterly sales shot clock.
“Publicly held solution providers are under a lot of stress to hit their marks and their numbers,” he said. “A lot of times the only way these companies can grow at a double digit rate is to make an acquisition. Over time it gets harder and harder for them to keep the quarterly sales shot clock running the way it should be.”
Venero said it is likely to take a year or more to integrate the systems, process and personnel of the two companies.
“Anytime there is consolidation like this we welcome it,” he said. “It changes Insight’s overhead structure and creates some FUD (fear, uncertainty and doubt). It makes them less flexible.”