ScanSource Inc. was so fed up with California’s high taxes 14 years ago that it moved its only presence in the state – a 10-worker sales operation – to Arizona, according to CEO Mike Baur.
Times have changed.
Acquisitions in the past year have given the Greenville-based distributor of technology products about 225 employees at two locations in Northern California, Sacramento and Petaluma.
Now California is home to more ScanSource employees than any other U.S. state except South Carolina, where almost 700 people work at the company’s headquarters off of Pelham Road in Greenville.
ScanSource’s total headcount at all 44 of its locations in the United States, Latin America, and Europe exceeds 2,600.
Baur still thinks California’s taxes are too high, but he said the new West Coast footprint does have its advantages.
For one thing, he told UBJ, it gives ScanSource offices near the headquarters of the Silicon Valley manufacturers whose products it distributes. Those include Hewlett-Packard, Cisco, Polycom, and Avaya.
“This whole business is always about relationships,” said Baur, who helped found ScanSource almost 25 years ago. “How can we understand where those companies are going and how can we plug ourselves into the middle of that?”
ScanSource’s new California offices also give it sales and customer service employees in the same time zone as its West Coast customers. That’s the reason the company established a presence in California in the first place, Baur said.
“Trying to get your best people to work in Greenville, S.C., at 8 o’clock at night, that’s kind of tough,” he said.
A further advantage, Baur said, is that Northern California is a good place to find technology industry talent that might want to move to Greenville, “where it’s a little slower, quality of life better, housing cheaper.”
About 75 of ScanSource’s new California employees came as the result of its purchase of Intelisys Communications, a distributor of telecommunications and cloud services based in Petaluma.
The other 150 California employees came with the acquisition of Sacramento-based POS Portal, a distributor of debit and credit card-reading equipment used by small retailers.
ScanSource agreed to pay a total of up to $392 million in cash for the two companies, with the exact total depending on how scheduled earnouts go.
Baur said the deals give ScanSource fast-growing and high-margin lines of business and make it a significant distributor of services and software for the first time, instead of just hardware.
The purchase of POS Portal means ScanSource is the leading distributor of electronic payment equipment, Baur said, on top of its longtime position as the leading distributor of point-of-sale equipment such as barcode scanners.
Baur, 60, is originally from Anderson and first sold technology products as an employee of the Radio Shack store in the former Greenville Mall.
Buzz Stryker, POS Portal’s co-founder and CEO, will continue to run that business, now a unit of ScanSource.
Stryker said he’s glad to have access to ScanSource’s Greenville headquarters as a location for servicing East Coast customers. Those customers include electronic payment processing companies based in Atlanta such as First Data Corp.
“We’re going to have more face-time coverage,” Stryker said. “We don’t have to get on a plane to go to important meetings.”
Headquarters: Greenville, SC
No. of employees: 2,600 plus
Locations: 44 in the US, Europe, Latin America
Ticker: SCSC on the Nasdaq
Market cap: $940.4 million (as of Aug. 24)