Arrow Offers Alcatel-Lucent Solutions

Arrow Electronics (ARW - Analyst Report) recently announced that its business segment Arrow Enterprise Computing Solutions (ECS) now offers the full line of enterprise voice, data and security solutions from Alcatel-Lucent (ALU - Analyst Report) in North America.

Arrow provides enterprise computing solutions to value-added resellers (VARs) through its global ECS business segment. The computing segment includes products like servers, workstations, storage products, microcomputer boards and systems, design systems, desktop computer systems, software, monitors, printers, flat panel displays, system chassis and enclosures, controllers and communication control equipment.

The addition of Alcatel-Lucent enterprise solutions to Arrow ECS’ networking portfolio is the result of Arrow’s acquisition of Nu Horizons Electronics Corp. In January 2011, Arrow completed the acquisition of Nu Horizons Electronics, a leading global distributor of advanced technology semiconductor, display, illumination and power solutions. The purchase price was $7.00 per share.

Employing approximately 650 employees, Nu Horizons generated sales of $671 million in fiscal 2010. The transaction is expected to become accretive to earnings in the first full year of operations by $0.05 – $0.10.

After integration, Nu Horizons resellers will be integrated into Arrow ECS, thereby giving access to Arrow ECS’ line card of more than 75 leading solutions and services across the data center. In addition, the legacy Nu Horizons team, with whom these resellers have relationships, will continue to serve as their primary support resources.

Arrow ECS also distributes Alcatel-Lucent enterprise solutions in the United Kingdom. Management stated that the addition of Alcatel-Lucent will represent a significant addition to its networking offerings for resellers.

Meanwhile, Arrow Electronics has also agreed to carry all quantities of lead-based products from Linear Technology (LLTC - Analyst Report). Linear Technology’s leaded parts are used for the production of a wide range of aerospace, defense, medical and critical industrial products and technologies

The agreement will ensure delivery of Linear products to customers on a worldwide basis who require a lead based solder option and complements Linear’s broad line of lead-free products.

Under the agreement, Arrow will fulfil orders of any size for Linear Technology lead-based products from inventories in its Reno, Nevada warehouse.

We continue to maintain a Neutral recommendation on Arrow. Our recommendation is supported by Zacks #3 Rank, which translates into a short-term rating of Hold.

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