In a bid to cash in on the fast-growing mobility sector and the convergence of telecom, computing and media, technology distributor Ingram Micro Inc. has agreed to buy Brightpoint Inc., which provides device lifecycle services to the wireless industry, for $US840m.
NYSE-listed Ingram Micro will pay about $US9 per share in cash, which represents a 66 per cent premium to Brightpoint's closing stock price on June 29. The purchase price includes the assumption of about $US190m in debt. Ingram expects to fund the deal with existing credit facilities, cash on hand, and $US300m in debt from Morgan Stanley Senior Funding Inc.
The deal is expected to close by the end of the year.
Indianapolis-based Brightpoint, founded in 1989, had $US5.2 billion in revenues in its 2011 fiscal, including about $US550 million from value-added logistics services. It has about 4000 employees and operates facilities in 24 countries. It has more than 25,000 B2B customers with over 100,000 points of sale globally; it handled more than 112 million wireless devices in 2011.
Brightpoint’s offerings are complementary to Ingram’s logistics and distribution businesses, which will help the company go to market with a portfolio of mobility device lifecycle services and products, Ingram Micro president and CEO, Alain Monie, said in a statement.
"Brightpoint is a well-run company with leading, high-value services and solutions coupled with excellent distribution channels in the global mobility market," Monie said.
The companies’ expanded geographic footprint and strong financial position will give vendors, network operators and mobile virtual network operators, partners and customers “one-stop” access to a wide range of mobility and technology products and services, according to the statement.
"Strategically, it is a great fit and is immediately additive to Ingram Micro's existing offerings," Monie said.
Ingram also liked Brightpoint’s long-term relationships with customers, vendor partners, network operators and mobile virtual network operators, Ingram Micro chief operating and financial officer, Bill Humes, said.
The mobility industry is projected to grow faster than other technology sectors, driven partly by growth in the smartphone and tablet segments, he noted.
“The convergence of telecommunications, computing and media is driving strong demand and should lead to cross-sell and up-sell opportunities, as our respective customer bases continue to converge. Together we expect to capitalize on this growth and generate benefits for our combined vendors, partners, customers, associates and shareholders greater than either company could on its own," Humes said.
Brightpint's senior management team will take up senior roles within the new organisation after the acquisition is complete. These include its regional presidents, Mark Howell (Americas), Bruce Thomlinson (APAC) and Anurag Gupta (EMEA), and Vincent Donargo, and BrightPoint's CFO. In addition, Robert Laikin will serve in a senior advisory role to Alain Monie.
Ingram Micro A/NZ could not comment on the deal.