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Avnet Unit Inks Deal with TechNexion

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Avnet Embedded, a unit of electronics and IT distributor Avnet Inc. (AVT), recently announced that it has entered into an agreement with TechNexion.

The agreement will help Avnet to provide its original equipment manufacturer customer base with low-cost and high-value embedded System-on-Modules, which will significantly lower costs for customers and cut short the product development cycle. As far as TechNexion is concerned, the inclusion of its products in Avnet’s technology portfolio will lead to increased exposure for its products.

TechNexion is one of the leading providers of a wide range of embedded modular solutions. It is a Freescale proven partner and founder of the Embedded Design Modules Standard, an ARM-based processor. TechNexion also provides turnkey embedded systems, touch-interface panel PCs and fanless systems.

Earlier this week, Avnet expanded its agreement with Cisco (CSCO) to distribute its high-value specialty data center products in Latin America and the Caribbean. The expansion of product lines across geographies is a big positive for a distributor such as Avnet and should further strengthen its core business of distributing electronic components.

Avnet reported revenues of $6.59 billion, up 4.5% from $6.31 billion in the year-ago quarter. Revenues in the quarter were toward the higher end of management’s guidance range of $6.15 billion to $6.75 billion and above the Zacks Consensus Estimate of $6.46 billion.

Based in Phoenix, Ariz., Avnet is an industrial distributor of electronic components, enterprise computer and storage products and embedded subsystems. Avnet distributes electronic components and computer products as received from suppliers. It also provides engineering design, materials management and logistics services, system integration, and configuration and supply chain advisory services.

Avnet’s leading position in electronics distribution, continuous cost cutting initiatives and acquisition synergies are encouraging. It does however see significant competition for both its domestic and foreign operations, especially from archrival Arrow Electronics Inc. (ARW).

Currently, Avnet has a Zacks Rank #3 (Hold). Investors may also consider Quantum Corp. (QTM), a stock from the same sector with a Zacks Rank #1 (Strong Buy).

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