Avnet Acquires Savoir for $140 Million, Becomes Top Midrange Distributor

With the recently-completed acquisition of Savoir Technology Group, Avnet Inc. surpassed KeyLink Systems (Cleveland) and Support Net Inc. (Indianapolis) to become the largest worldwide distributor of IBM midrange servers.

Until the acquisition, which was first announced in March, Savoir held the top spot among IBM midrange server distributors. Avnet, a Fortune 500 company, agreed to purchase Savoir for $140 million, along with the assumption of Savoir’s debt. Savoir’s IBM distribution business will now be incorporated into Hall-Mark Global Solutions, a division of Avnet Computer Marketing. Savoir common stock holders will receive .11452 of a share of Avnet common stock for each share; preferred stockholders will receive .16098 of a share of Avnet common stock.

“This has the opportunity to have a very positive impact on our customers and give them a better opportunity for stronger support and growth for their businesses, and that’s what this is all about,” says Jim Teter, senior VP of marketing for new North America IBM Business Unit, and a former VP of sales and marketing at Savoir.

Savoir (Lake Forest, Calif.) is the top distributor of IBM midrange services in the Americas, primarily focused on IBM AS/400, RS/6000, S/390 and Netfinity servers, storage products and software. Tempe, Ariz.-based Avnet Computer Marketing is a value-added distributor of enterprise computer systems and software to VARs.

One major change for Avnet upon acquiring Savoir is that it now allows them to branch into the mainframe market, where they did not have a presence before. Teter emphasizes that in terms of product offerings, however, not much will change in terms of either Savoir’s or Avnet’s product lines. Teter expects the integrated company do benefit more in terms of finding better ways of doing business, than in finding entirely new business.

“We all offered very similar sorts of products because we’re both IBM distributors,” Teter says. “The true value of this merger or acquisition is that we now have the opportunity to look at what we call best practices and best people.”

This opportunity is especially important for Savoir, whose stockholders advised then-chairman Scott Munro to start looking for buyers, which spurred the Avnet offer, according to Teter. Teter says the company knew it had to make some changes, and the acquisition provided both the necessity and a unique opportunity to re-examine and retool business practices.

“This was the best alternative for the shareholders and for the company,” he says. “You need an impending event sometimes to cause change. You have a reason to do it and to look at these issues that need to be changed. Plus, you never know the details about what someone else is actually doing until you sit down and talk about it.”

According to Teter, companies officials expect a fairly smooth transition in terms of migrating employees, systems and data to the Avnet system.

“Avnet is 10 times bigger than Savoir was, so we will be on Avnet’s system, of course, but all we’re concerned about is having the same amount of information about our customers, and eventually being able to get further information resources,” Teter says. “We believe that a rapid integration is the best way to go. We expect to be fully integrated very rapidly – within 30 days.”

Because of that rapid integration, Teter added, customers have not expressed concern with the move, and seem to be comfortable with the transition to a new supplier.

“Our customers say, ‘do I still have my same account manager’ and we say yes, and they say, ‘Well, fine then,’” he says. “We will look at how our customers will benefit from a new way of doing things, and I think they’re gonna be the real winners in this. We’re looking at ways to see how we make 1+1=3 instead of 2.”

Savoir’s storage products business segment and integration sector will be incorporated into Avnet Applied Computing, a division separate from the Hall-Mark IBM unit, which markets to original equipment manufacturers.

Related Information:

  • Savoir Technology Group (new window)
  • Avnet Inc. (new window)