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Acquisitions Back in Ingram Micro’s Growth Plans

Ingram Micro Inc., the biggest distributor of computers, software and other technology products in the world, is looking for acquisitions to help fuel growth in coming years.

Chief Executive Gregory Spierkel highlighted the renewed emphasis recently to shareholders and analysts at a conference in New York, where he outlined the company’s growth plans through 2015.

“We think we’re going to do more than what we have done in the last two years,” Spierkel said last month.

Ingram Micro has been quiet on the acquisitions front for more than a year.

The Santa Ana-based company’s last buy was in September 2010, when it picked up InterAct BVBA for an undisclosed sum. The small Belgium-based distributor specialized in reselling software and providing services to companies looking to set up a cloud computing network.

In July 2010, it acquired Asiasoft Hong Kong Ltd. for unspecified terms, a distributor of software licenses of business applications for virtualization, security, system and desktop management, networking and business planning. Asiasoft also offers training, consulting and tech support services.

And in 2009, Ingram Micro bought two New Zealand distributors, Vantex Technology Distribution Ltd. and Value Added Distributors Ltd., on undisclosed terms.

Ingram Micro customers are known as value-added resellers, as most are technology consultants that sell goods and services to small and midsize businesses. It also sells to retailers.

The county’s largest company by revenue, Ingram Micro projects annual revenue growth between 4.5% and 6.5% through 2015. That would put annual sales at more than $42 billion in four years, up more than 20% today.

Production Sell-Off

Irvine-based disk drive maker Western Digital Corp. will have to sell off one of its production lines to gain approval from European regulators in its bid for Hitachi Global Storage Technologies Ltd. in San Jose.

A European Union commission approved the $4.3 billion buy late last month on the condition that Western Digital divests its business of 3.5-inch hard disk drives, including a production plant and related assets.

“The proposed divestiture will ensure that competition in the industry is fully restored before the merger is implemented,” said Joaquin Almunia, commission vice president in charge of competition policy.

The divestiture will also include the transfer or licensing of intellectual property rights, the transfer of personnel and supply of certain disk drive components.

The commission said the deal, if left unimpeded, would have allowed Western Digital to face competition only from Scotts Valley rival Seagate Technology LLC in the 3.5-inch disk drive market, furthering antitrust concerns.

Hard-disk drives store and allow access to data. Western Digital’s disk drives go into computers, external storage devices, corporate networks and consumer electronics such as DVR players.

Western Digital has led by number of drives shipped for nearly two years but is second in revenue to Seagate, which leads on sales of the more-expensive corporate drives.

In April, Seagate offered $1.4 billion for Samsung Electronics Co.’s disk drive business. The EU commission recently approved that deal (see related story, page 3).

Netlist Offering

Irvine-based memory products maker Netlist Inc. has filed plans to sell up to $10 million in stock.

The company, which makes memory boards with specialized controller chips that help manage other memory within servers, intends to use the proceeds for “general corporate purposes,” according to a filing last month with the Securities and Exchange Commission.

Netlist shares have had a nice run in the last three months after rebounding from a rough couple of years. The company went public in late 2006 after raising $35 million.

Its thinly traded shares have jumped nearly 51% in the last three months to a recent market value of about $69 million. Sales have increased in each of the last four quarters, and the company could be in line to benefit from President Obama’s push to expand U.S. trade in the Asia-Pacific region, according to company watchers.

Memory-chip slumps in 2007 and 2008 almost steamrolled the company. Falling prices of memory chips slashed the value of its stockpiles and squeezed profit, and Netlist has struggled to recover.

Its stock nose-dived in early 2009 before rebounding later that year when the company took steps to move beyond memory modules, which help computers run faster but have become commodities.

The company’s more-advanced controller chips help boost performance, cut down on power and save on costs for running data storage centers, according to Netlist.

In the current quarter, analysts on average project a loss of $1.2 million on $16.2 million in sales.

A year ago, the company posted a loss of $3.2 million on $10 million in revenue.

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