Avnet Buys Ontrack for Asian Expansion

Published: August 28, 2008

by Timothy Prickett Morgan

IT distributor Avnet has been battling with rival Arrow Electronics to make acquisitions to build out its business on a global scale, particularly in fast-growing sub-markets in Europe and Asia. Last week, it was Avnet's turn to make a deal, and in this case, the Phoenix, Arizona, company acquired Ontrack Solutions, a systems integrator and reseller based in Mumbai, India.

Ontrack was founded in 1992, and is one of the key distributors for IBM's servers, storage, services, and security and systems management software in India and adjacent countries. In terms of servers, Ontrack is a reseller of Power Systems (AIX and i) as well as System x and BladeCenter machinery, and it also sells maintenance services for this gear as well as IBM's Internet Security Systems appliances and Tivoli systems management and security software. The company has also been a partner of networking giant Cisco Systems since 1996 and has over the years become a reseller for Hewlett-Packard servers as well as software from VMware, Citrix Systems, CheckPoint Software, RSA Security, and others. According to the company's Web site, it had sales of 700 million rupees in 2007, which works out to about $16.6 million at current dollar-rupee exchange rates. According to a statement put out by Avnet, Ontrack sold approximately $13 million in services through its fiscal 2008 year ended March 31.

For the past decade, Avnet has had a fairly large electronics distribution operation, called the Electronics Marketing Group, based in Bangalore. Avnet is projecting that the Asian IT market will grow to a $17 billion sales opportunity by 2009. Ontrack is being merged into the operations of Avnet's Technology Solutions Asia Pacific unit in the wake of the acquisition.

"This acquisition gives us a solid starting point to build our business in one of the fastest growing IT markets in Asia," said John Paget, global president of Avnet Technology Solutions. "The current owners, G. Balakrishnan and Naresh Desai, will lead the local Avnet Technology Solutions team as we continue to invest in profitable growth. We will leverage the skills and multi location footprint of Ontrack to build a leading value-added solutions distribution business throughout India."

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