ScanSource Agrees to Sell Latin America Business Outside of BrazilAug 11, 2020 12:12PM ● By David Dykes
By David Dykes
Greenville-based ScanSource, Inc. (Nasdaq: SCSC), a leading provider of technology products and solutions, said it has agreed to sell its products businesses in Mexico, Colombia, Chile, and Peru and its Miami-based export operations to Intcomex.
Terms weren’t disclosed.
ScanSource officials said the action is part of the company’s strategic portfolio repositioning to align investments with higher-growth, higher-margin businesses, including ScanSource Brazil.
“After a very thorough process, we are pleased to have found a highly respected, well-established buyer with a proven track record in Latin America,” said Mike Baur, ScanSource’s chairman and CEO. “Our more than 140 employees in Latin America are excited to become part of Intcomex, a company that shares our commitment to long-term partner relationships. Our business in Latin America fits well with the Intcomex business, and I see this as a positive move for our employees, partners and suppliers.”
Intcomex provides value-added solutions and technology products in Latin America, outside of Brazil, and the Caribbean. It has been in operation for more than 30 years.
“We welcome our new employees, partners, clients and suppliers,” said Mike Shalom, CEO, Intcomex. “The acquisition further solidifies our over thirty-year commitment of local distribution coupled with long-standing supplier and customer relationships.”
ScanSource said it expects its Latin America business outside of Brazil to be classified as “held for sale” at June 30, 2020, and reported as discontinued operations.
Related to the “held for sale” classification, ScanSource said it expects to record a pre-tax non-cash charge of approximately $28 million. The transaction is expected to close by Sept. 30, 2020, subject to the satisfaction of customary closing considerations, company officials said.
ScanSource recently said it was taking actions, including an approximate 200-employee reduction in its North American workforce and executive team salary cuts, to address the business impacts of the Covid-19 pandemic and prepare for the next phase of growth.
The actions are part of a $30 million expense reduction plan designed to better align the cost structure for its wholesale distribution business with lower sales volumes as a result of the pandemic, company officials said.