About Converge, Inc.

Arrow Electronics knows its target market. The company is a leading global distributor of electronic components and computer products, alongside rival Avnet. It sells semiconductors, passive components, interconnect products, and computer peripherals to more than 100,000 equipment manufacturers and commercial customers. Arrow also provides value-added services, such as materials planning, design and engineering, inventory management, and contract manufacturing. It distributes products made by such manufacturers as  IBMPanasonicMicrosoft, and Intel. The company operates from some 460 locations across the globe (serving more than 85 countries); half of its sales comes from the Americas.

Operations

Arrow operates in two segments -- global components and Enterprise Computing Solutions (ECS). The larger division, global components, accounts for 62% of sales. Its product offerings consist of semiconductors; passive, electro-mechanical, and interconnect products, such as capacitors, resistors, potentiometers, power supplies, relays, switches, and connectors; and computing and memory products. Most of its customers' orders are too large or too frequent to be available via a direct purchase from the manufacturer.

Its Enterprise Computing Solutions (ECS) business -- which sells hardware, software, storage, and security products to value-added resellers -- makes up about 38% of sales. ECS has added professional consulting, cloud computing, managed services, and technical training as the business unit expands its support for resellers and systems integrators beyond hardware sales.

Geographic Reach

The company generates 50% of sales from the Americas (mostly the US), with Europe, the Middle East, and Africa (EMEA) and the Asia-Pacific region contributing 29% and 21%, respectively.

Altogether, Arrow has 300 sales offices and 40 distribution centers in 56 countries worldwide.

Sales and Marketing

Arrow serves more than 100,000 OEMs and contract manufacturers through its components business segment and value-added resellers through its ECS business segment. Most of its sales are made on an order-by-order basis, rather than through long-term sales contracts.

Industries served include aerospace and defense, alternative energy, automotive, computers, gaming, industrial equipment, instrumentation, medical and scientific devices, networking, optoelectronics, and telecommunications equipment.

Financial Performance

Sales inched up 2% in 2015 to $23.3 billion. The ECS segment's sales rose 5% while global components had just a 1% increase.

Net income stood at $498 million in 2015, pretty much unchanged from 2014. The company had higher acquisition-related expenses in 2015.

And cash flow from operations slid to $655 million in 2015, down from $673 million the year before.

Strategy

Along with rival Avnet, Arrow is highly acquisitive in order to consolidate competition, grow its footprint, and increase product offerings. The company maintains its competitive edge by offering more value-added services to diversify its revenue stream. It also keeps its supplier base large so that customers can procure from a one-stop shop, rather than purchase from several different vendors.

Arrow added to its ECS offerings through partnerships and alliances. Arrow added SoftLayer, an IBM company, to its partners through which it offers cloud services. It made similar arrangements with Splunk to resell its enterprise software and with Nutanix for its IT services.

Mergers & Acquisitions

Arrow continues to expand its service capabilities and global presence, primarily through acquisitions.

In 2015, the company acquired immixGroup Inc., a provider supporting value-added resellers, service providers, and other public sector channel partners with specialized resources, for $280 million, to accelerate government sales located in North America.

The company bought another nine companies during the year for a total of about $263 million. Among the acquisition were ATM Electronic Corp., an electronic component distributor based in Taiwan; the United Technical Publishing Division of Hearst Business Media; and RDC, a technology returns and asset management company in Europe.

In 2014 Arrow bought five companies, the largest of which is Data Mogul AG for about $105 million. The acquisition further extends Arrow's reach in Europe.

- Show Less + Show Full Description

Converge, Inc.

4 Technology Dr
Peabody, MA 01960-7907
Phone: 1 (978) 538-8000

Stats

  • Employer Type: Public

Major Office Locations

  • Peabody, MA

Get Our Career Newsletter

Interview, resume and job search tips emailed directly to you.