SNX Expands Into Consumer Business

Analyst Shaw Wu of Kaufman Brothers maintained his "buy" rating on Synnex Corp (NYSE: SNX). The target price for SNX is set to $34.

Synnex has announced its intention to acquire Jack of All Games, the video game distribution subsidiary of Take-Two Interactive (TTWO), for $36.5 million in cash and $6.75 million in incentives. The deal makes sense and the price is reasonable, the analyst said. The analyst expects the deal to help SNX to expand into consumer segment. Moreover, the deal will help the company to improve its margins.

Synnex is poised to benefit from its low-cost business model and expanding product line, according to Kaufman Brothers. Although the company’s shares appreciated following the announcement of the deal, the stock remains attractive, the analyst added.