Insight Acquires Comark For $150 Million

Insight Enterprises

Insight, a public company which also on Thursday reported first-quarter revenue of $528 million, acquired Comark for a total of about $150 million, including $100 million in cash and about 2.3 million shares of Insight stock worth about $50 million, Insight executives said.

The acquisition of Comark now gives Insight the capability to service clients of all sizes and increases the company's presence in the public sector segment, Insight executives said. Insight is expected to focus on servicing the SMB space, while Comark is expected to service midsize to large enterprises. The two will share the public-sector market, executives said.

Comark, Bloomingdale, Ill., has an annual revenue of about $1.5 billion and serves clients from the SMB space to the enterprise with a full range of products and services.

Comark also has a distribution subsidiary, PC Wholesale, also based in Bloomingdale. PC Wholesale has annual revenue of more than $400 million. Executives at both companies would not confirm whether PC Wholesale is included in the deal.

About 80 percent of PC Wholesale's business is through solution providers that have sales of less than $3 million a year.

Ingram Micro executives would not speculate on whether the merger would impact its business.

"It may or it may not [affect Ingram Micro's business," said Mike Grainger, president and COO at the distributor. "For example, two or three weeks ago PC Connection made an acquisition of MoreDirect. We did business with both of them. The way they're going to organize, MoreDirect will be a wholly owned subsidiary, so there's no reason to think it will impact on our revenue by itself. That could be the same situation."

In a prepared statement, Timothy Crown, CEO of Insight, said, "Comark's success in the medium-to-large enterprise customer segment, teamed with Insight's expertise with respect to the small- and medium-sized business customer, solidifies our position as a major player in the industry. The combined enterprise is better equipped to respond to changing market dynamics and well-positioned to remain a leading provider of IT products and services to businesses around the globe."

Another benefit of the acquisition is that "the consolidated companies' presence in the government area has been greatly increased," Crown said.

Insight is no stranger to acquisitions. Last October, the company closed its acquisition of Action, a U.K.-based direct marketer. That acquisition helped Insight report a 3 percent operating profit for the first quarter of 2002, compared with a break-even fourth quarter 2001, company executives said.

Also on Thursday, Insight reported revenue for the first quarter ended March 31 of $528 million, down 5 percent from the $557.5 million reported for the same period last year.

The company also reported earnings of $12.1 million, or 29 cents per share, compared with $14.3 million, or 35 cents per share, for the same period a year ago. This quarter's earnings are before a charge of $8.9 million related to acquisitions.

Officials did not respond to requests for further information.

SCOTT CAMPBELL contributed to this story.