Arrow Electronics Inc. of Melville, N.Y. has acquired Mississauga, Ont.-based value added distributor SkyData Corp. for an undisclosed sum.
The acquisition fee was characterized by Howard Goldberg, president of SkyData, to be in the millions.
The deal was inked in late February and is expected to pass U.S. regulatory approvals and close early this month, Goldberg said.
No layoffs are expected at Skydata, and the company will retain its name. The company celebrated 10 years in business last year and posted more than $43 million in sales. It has sales offices in Ottawa, Calgary and Laval, Que. Skydata is also EMC Corp.’s largest distribution partner in Canada. Arrow has also been a long time partner of EMC, but that wasn’t why this deal took place, according to Goldberg.
“We’ve been approached over the last number of years by several distributors -the commercial guys, the broadliners, the so-called value-add guys – to acquire our business, and it was relatively easy to understand the level of interest,” he said.
Acquisition discussions started, by Arrow, back in December, 2004. For Goldberg the deal hinged on remuneration, that all Skydata staff be retained and that the company’s business model would stay in place.
“We evaluated our position in the market place, prospects for the future, and the risk with our on going enterprise and in the final analysis we determined that the Arrow proposition would ensure that our business would not only prosper, in my estimation, but flourish in the coming years,” Goldberg said.
For Arrow, acquiring SkyData was an opportunity to expand its business even further in Canada. According to Ed Coleman, president of Arrow, Canada is the fastest growing region for the distributor in North America.
“We have a great relationship with EMC and this is an opportunity to deepen that relationship, and SkyData has a reputation of being a high value add distributor. I like their solutions focus and how they go to market,” Coleman said.
Skydata will continue to operate separately from Arrow. Goldberg will continue running the company, which, besides EMC, distributes Sony, QLogic, Adic, Brocade, Emulex and Quantum.
Arrow does have an office in Canada, located in Mississauga. Goldberg will report to Arrow Canada president Robert Boulet, who once ran GE Capital.
Goldberg pointed out that it will be “business as usual,” except to say that Arrow will be adding more resources to the company in areas such as marketing, financial resources, and electronic delivery systems.
“Arrow is a US$12 billion organization and they have depth in every disipline,” he said.
Goldberg believes Arrow wanted Skydata’s on-going revenue streams, which will be incremental to their business.
Arrow Canada also has specific business units for each vendor it represents.
