GREENVILLE, S.C. - ScanSource , Inc. (NASDAQ: NASDAQ:SCSC), a prominent distributor linking devices with the cloud, has announced the acquisition of Resourcive, a technology advisory firm known for strategic IT sourcing solutions. The transaction, which was finalized today, aims to enhance ScanSource's service offerings to the mid-market and enterprise sectors.
Resourcive, established in 2001, has built a reputation for guiding clients in leveraging technology to foster value creation, reduce costs, and increase profitability. With a clientele of over 300 companies, Resourcive specializes in cloud, IoT, communications, contact center, and networking technologies.
The acquisition leads to the establishment of ScanSource Channel Advisors, a new business division focused on shaping the future channel model. This unit will operate independently from ScanSource’s Intelisys business, a leading technology services distributor. The Resourcive team, including its leadership under Tom Gesky, will join ScanSource, with Mark Morgan, a veteran executive at ScanSource, taking the helm as President of ScanSource Channel Advisors.
Gesky, the Founder and CEO of Resourcive, expressed confidence in the management team's ability to thrive under the new ownership, highlighting the expanded resources and capabilities that will now be available to their customers. Kyle Hall, President of Resourcive, echoed the sentiment, anticipating the acquisition to act as a catalyst for further growth.
In other recent news, ScanSource has reported mixed results for its third quarter. Despite witnessing a 15% decline in net sales for its hardware business due to decreased demand, the company has demonstrated strong margins and robust free cash flow. On the other hand, the company's Intelisys segment has seen a 7% year-over-year increase in end-user billings, reaching an annualized $2.68 billion. This growth is attributed to the company's CCaaS and UCaaS offerings.
ScanSource has announced plans to expand its agency channel and has authorized a $100 million share repurchase. The company's leadership has acknowledged upcoming challenges, including macroeconomic uncertainties and potential channel conflict with the new agency initiative, but remains cautiously optimistic about growth in certain hardware segments.
These are recent developments and part of a broader strategy to prioritize Intelisys and strong free cash flow for fiscal year 2024. ScanSource also plans to invest in talent, training, and tools to support its growth as a technology services distributor. Despite the challenges, the company continues to focus on expanding its agency channel to increase margin opportunities.
InvestingPro Insights
As ScanSource, Inc. (NASDAQ: SCSC) embarks on the strategic acquisition of Resourcive, the financial metrics and analyst insights from InvestingPro provide a glimpse into the company's current standing and future prospects. The market has recognized ScanSource's potential, reflected in its impressive one-year price total return of 55.98%, signaling strong investor confidence in the company's trajectory. With a market capitalization of $1.17 billion and a P/E ratio of 14.76, ScanSource is positioned as a company with a reasonable valuation in the market.
An InvestingPro Tip highlights that ScanSource has a high shareholder yield, which suggests that investors could benefit from both capital gains and potential distributions. This is particularly relevant as the company expands its services through the Resourcive acquisition, possibly unlocking new value creation avenues. Additionally, the company's liquid assets surpass its short-term obligations, indicating a stable financial position that could support its strategic initiatives.
On the operational front, ScanSource's gross profit margin stands at 11.86%, which, according to another InvestingPro Tip, points to weaker gross profit margins. This could suggest that the company faces challenges in maintaining profitability ratios in line with the industry. Analysts have revised their earnings expectations downwards for the upcoming period, hinting at potential headwinds or conservative estimates for the company's financial performance.
For those interested in a deeper dive into ScanSource's financial health and future outlook, InvestingPro offers additional tips, providing a comprehensive analysis for investors and stakeholders. Currently, there are 11 more InvestingPro Tips available, which can be accessed to gain further insights into ScanSource's financial metrics and analyst expectations.
These insights and data points serve as valuable tools for investors considering the implications of ScanSource's recent acquisition and its impact on the company's financial standing and market position. As ScanSource continues to evolve, keeping an eye on these metrics will be crucial for understanding its progress and potential.
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