Tech Data Corporation has sold off its business operations in Chile and Peru to Ingram Micro and announced that it might exit Uruguay as well. Despite operating for the past 16 years in these South American countries, Tech Data conceded that it was not able to make good returns on its investment.
Clearwater, Florida-based Tech Data Corp will however expand its Latin American export business in Miami as well as its operations in Mexico, which the company describes as a “larger and more developed IT market.”
From now on, the company will concentrate its resources in regions where its business is yielding good returns. Tech Data recently appointed industry veteran Eduardo Coronado to lead its operations in Mexico.
“After careful consideration, we concluded that exiting these operations was in the best interest of our business and our shareholders,” said Robert M. Dutkowsky, CEO of Tech Data. “Over the course of 16 years of operating in Chile, Peru and Uruguay, it has been difficult to achieve the necessary scale to consistently generate acceptable levels of profit and return on invested capital.”
In 2012, Tech Data exited Brazil, citing similar difficulties in making money there. Tech Data generated $26.8 billion in net sales for the fiscal year ended Jan. 31, 2014.
Ingram Micro, on the other hand, says it is performing well in Peru and Chile. Moreover, it says the purchase of Tech Data units will add US$270 million to its annual revenue and help expand its product offerings in mobility, supply chain solutions and cloud.
“This acquisition is an excellent complement to our existing operations in Latin America,” said Alain Monié, CEO of Ingram Micro. “Latin America is consistently one of our top performing regions and the addition of these businesses to our current operations in Peru and Chile further reinforces to our customers and vendors.”