ScanSource Acquires MicroAge in $220M Deal to Expand IT Services Footprint
On September 2, ScanSource (NASDAQ:SCSC) completed its acquisition of MicroAge for $220.5 million in an all-cash deal announced just two weeks earlier on August 20. The purchase aims to expand ScanSource’s presence in managed services, cybersecurity, and cloud solutions—areas where it has traditionally focused more on hardware distribution. ScanSource reported strong performance ahead of the acquisition, with Q4 net sales rising 17.3% year-over-year to $953.1 million and non-GAAP earnings per share increasing by over 43%. The company also generated $113.8 million in free cash flow for fiscal 2026 while repurchasing nearly $98 million of stock, indicating a strong balance sheet prior to the deal. However, ScanSource financed the acquisition using its existing credit facility rather than cash on hand, increasing debt from $101.4 million as of June 30 to over double that amount post-acquisition. While management expects improved gross margins and free cash flow generation in the first year following integration, investors are still waiting for updated financial guidance that includes MicroAge’s impact.
Tickers: $SCSC
Topics: acquisitions IT services margin expansion recurring revenue