Orange County Business Journal

Ingram to Buy Indianapolis-Based Distributor for $840M

Chris Casacchia Monday, July 2, 2012

Santa Ana-based Ingram Micro Inc. has agreed to buy wholesale distributor Brightpoint Inc. for $840 million in a cash deal.

The agreement calls for Ingram to acquire all outstanding shares of Brightpoint common shares for $9 per share in cash, a 66% premium of Brightpoint’s closing stock price on June 29.

The transaction includes roughly $190 million of Brightpoint’s estimated debt as of June 30.

Brightpoint shareholders are expected to weigh in the on the deal at a special meeting this quarter.

The buy is expected to close before the end of the year.

The acquisition would bolster Ingram’s position in the rapidly expanding mobile services sector, which brings higher margins and a customer base of more than 25,000 that helped move some 112 million wireless devices in 2011.

Ingram is the largest technology distributor in the world with $36.3 billion in sales last year.

The deal also is expected to save Ingram about $55 million in costs by 2014 while significantly boosting revenue, according to the company.

Indianoplis-based Brightpoint saw $5.2 billion in sales last year with a gross margin of 7.2%. The company employs 4,000 people and operates in 24 countries, with sales in more than 75 countries around the world.

It was established in 1989.

Ingram is the biggest company based in Orange County by revenue. It typically nets a little more than a penny on the dollar and competes against several big distributors, including Phoenix-based Avnet Inc. and Arrow Electronics in Englewood, Colo.

The deal is expected add about $27 million to Ingram earnings in 2013 and $53 million in 2014, excluding one-time charges and integration costs.

Analyst on average forecast adjusted profits of about $295 million for Ingram in 2012.

Several Brightpoint execs will take senior roles with Ingram, including Chief Financial Officer Vincent Donargo and regional presidents Mark Howell (Americas), Bruce Thomlinson (Asia-Pacific) and Anurag Gupta (Europe, Middle East and Africa).

Founder and Chief Executive Robert Laikin will serve in a senior advisory role to Ingram Chief Executive Alain Monie.

Ingram shares are up 1.5% in early afternoon trading to a market value of roughly $2.7 billion.

Brightpoint shares skyrocketed 63% to a market value of about $610 million.