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Monié Makes Good on Mobility Talk

New Ingram Micro Inc. Chief Executive Alain Monié put his stamp on the company with last week’s deal to acquire wholesale distributor BrightPoint Inc. for $840 million.

The cash deal is the Santa Ana-based company’s first acquisition under Monié, who in January took over the chief executive role at Ingram, Orange County’s largest public company by revenue.

The BrightPoint buy promises inroads to high-growth, high-margin business lines of products and services for the mobility segment, which includes smart phones, accessories, tablets, laptops and activation services, among others.

Monié pegged the mobility segment for growth upon taking the helm of Ingram earlier this year.

“I think BrightPoint really fits in almost all of our strategic direction,” Monié told the Business Journal shortly after the deal was announced July 2. “Mobility has been on the radar for quite for some time.”

The deal, expected to close later this year, stands to be Ingram’s largest in its 32-year history, trumping its 2004 buy of Australia-based Tech Pacific Ltd. for $530 million.

Ingram is the largest technology distributor in the world with $36.3 billion in sales last year, with $244.2 million in earnings. It typically nets less than a penny on the dollar, and competes against several big distributors, including Phoenix-based Avnet Inc. and Arrow Electronics Inc. in Englewood, Colo.

BrightPoint, based in Indianapolis, saw $6.3 billion in sales last year with earnings of $48.8 million.

BrightPoint had a gross margin of 6.3% in the first quarter of this year, compared with 5.41% for Ingram.

• Headquarters: Santa Ana

• Business: Technology distribution, services

• Founded: 1979

• Ticker symbol: IM (NYSE)

• 2011 revenue: $36.3 billion

• Recent earnings: $90 million in Q1

• Market value: About $2.64 billion

• Notable: In deal to pay $840 million for Indianapolis-based BrightPoint Inc.

Cost Savings

The deal is expected to save Ingram about $55 million in costs by 2014, the company said. It is expected to add about $27 million to Ingram earnings in 2013 and $53 million in 2014, excluding one-time charges and integration costs.

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

Monié has eyed the mobile market for growth since replacing Gregory Spierkel, who announced his resignation in January.

In March he named industry veteran Michael Romero vice president and general manager of Ingram’s newly established North American mobile business unit, which includes smart phones, accessories, tablets, laptops, activation services and integrated products.

“Brightpoint gives us scale immediately in this industry,” Monié said.

BrightPoint has operations in 24 countries and a customer base of more than 25,000 companies. It competes with Miami-based Brightstar Corp., which had $5.7 billion in revenue last year, for the title of world’s largest wireless device distributor.

Both companies compete to a lesser extent with 20:20 Mobile Group Ltd. in the U.K. and High Point, N.C.-based New Breed Logistics.

The mobile segment is in the midst of a major growth spurt.

Shipments

Englewood, Colo.-based market tracker IHS Inc. forecasts shipments of wireless video-enabled devices such as smart phones, notebooks and tablets will grow exponentially, from 6.6 million units in 2010 to 241.1 million units by 2015.

“We’ve seen this growth pattern coming for a few years,” Monié said.

Ingram has been distributing mobile devices for years in dozens of countries, but the BrightPoint buy strengthens its operations in activations, repairs and logistics, according to Monié.

“This was very compelling leverage we could get,” he said.

Retaining BrightPoint executives was a key part of the deal, according to Monié.

“We needed the expertise of top managers, and they all decided to stay,” he said.

BrightPoint Execs

Several BrightPoint executives 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 Monié.

BrightPoint employs about 4,000 companywide, and has about 65 staffers at its U.S. headquarters in Indianapolis.

Monié said it’s too early to discuss integration plans.

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