ScanSource Inc

ScanSource Inc. has closed its all-cash acquisition of MicroAge, a full-service solutions integrator with a 50-year legacy of enterprise support, in a deal valued at $220.5 million and financed through ScanSource's existing credit facility. Management expects the acquisition to be accretive to gross profit margin, adjusted EBITDA margin and non-GAAP EPS in the first year following closing, while also being free-cash-flow positive, and says it expands ScanSource's capabilities in higher-margin IT solutions and services including cloud, cybersecurity, data center and AI. The announcement follows ScanSource's fiscal 2026 fourth quarter results, in which net sales rose 17.3% to $953.1 million and non-GAAP diluted EPS of $1.46 surged 43.1% from the same period last year. The deal adds leverage because ScanSource is relying on borrowings to finance it, and management's expected margin, earnings and free-cash-flow benefits remain projections rather than realized results. Institutional data tracked by Insider Monkey shows hedge fund exposure to ScanSource rose to 20 funds by the end of the second quarter of 2026 from 16 in the previous quarter, with BlackRock the largest institutional investor at 3.84 million shares, or 19.07% of outstanding shares.

ScanSource reported strong fiscal fourth-quarter results and announced a definitive agreement to acquire MicroAge, a move that expands its total addressable market and adds services capabilities in cloud, cybersecurity, data center, and AI. For the quarter, net sales rose 17% year over year, with non-GAAP EPS up 43% to $1.46 per share, a record. Full-year net sales grew 6%, with recurring revenues up 10.6% and consolidated gross profit up 7%. The company generated $114 million in free cash flow and repurchased $98 million in shares during the year. For fiscal 2027, excluding the MicroAge acquisition, ScanSource expects organic revenue growth of 6% to 10%, adjusted EBITDA between $158 million and $165 million, and free cash flow of at least $85 million. The acquisition is expected to close by the end of the first quarter, with more details to be provided on the next earnings call.

IT distribution and solutions stocks reported strong second-quarter results, with the eight companies tracked beating revenue consensus estimates by 9.9% and guiding next quarter's revenue 10.4% above expectations. Despite the outperformance, shares of the group have fallen 5.1% on average since reporting. CDW posted revenue of $6.57 billion, up 10% year over year and 5.2% above estimates, but its stock dropped 10.8% to $137.30. TD SYNNEX led with revenue of $19.57 billion, up 31% and 16.6% above estimates, yet its shares fell 10.5% to $247.96. ScanSource delivered the biggest beat at 18.8% above estimates with revenue of $953.1 million, and its stock rose 5.5% to $54.23.

ScanSource shares surged 9.7% after the company reported fourth-quarter 2026 earnings of $1.46 per share, beating the Zacks Consensus Estimate of $1.11 per share. Advance Auto Parts shares plunged 24.6% after the company reported second-quarter 2026 revenues of $2 billion, missing the Zacks Consensus Estimate by 1.66%. Deere & Company shares rose 6.9% after the company reported third-quarter 2026 earnings of $5.1 per share, beating the Zacks Consensus Estimate of $4.79 per share. Nordson Corporation shares rose 8% after the company reported third-quarter 2026 earnings of $3.25 per share, beating the Zacks Consensus Estimate of $3.09 per share.

ScanSource, Inc. has agreed to acquire MicroAge, a leading IT solutions integrator and managed services provider, in an all-cash transaction valued at $220.5 million. The deal is expected to close in the quarter ending September 30, 2026, subject to regulatory approval and customary conditions. MicroAge serves approximately 2,400 U.S. clients with more than 200 associates and holds partnerships with Microsoft, Dell, Sophos, HPE, CrowdStrike, and VMware. ScanSource expects the acquisition to be accretive to gross profit margin, adjusted EBITDA margin, and non-GAAP EPS in the first year following close, and to be free cash flow positive. The transaction will be funded through borrowings under ScanSource's existing credit facility.

Hewlett Packard Enterprise is broadening its distribution agreement with ScanSource to include Juniper Networks products following its acquisition of Juniper. ScanSource, a foundational channel partner that has distributed HPE Aruba networking products across the US for nearly two decades, announced on June 30 that it will add Juniper products to its portfolio through its Launch Point program, which provides marketing strategies and sales support. The move expands the market reach of HPE's networking business, which includes an AI-enabled platform for managing wireless, wireline, and software-defined networks.

Hewlett Packard Enterprise has expanded its partnership with ScanSource to include HPE Juniper Networking, aiming to improve network performance and simplify operations for partners. On June 17, HPE also announced that Vultr selected HPE and NVIDIA for large-scale AI datacenter deployments using the NVIDIA GB300 NVL72 by HPE and NVIDIA Spectrum-X Ethernet networking. Additionally, HPE unveiled advancements in its self-driving networking strategy, including new AI data center networking, routing, and security innovations, along with new HPE Juniper Networking QFX Switches optimized for inferencing.