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Ingram Adds Verizon Dealers to Mobile List

Santa Ana-based Ingram Micro Inc. has landed one of its largest mobile device distributions deals, adding to its client list in the higher-margin segment targeted by Chief Executive Alain Monie when he spearheaded the priciest acquisitions in the company’s history 18 months ago.

The distribution and supply chain agreement with 360 Group, a consortium of four of Verizon Wireless’ largest national dealers, is valued at “several hundred million dollars” annually and carries “a very nice contribution margin,” Monie told analysts on a recent conference call following the company’s first-quarter earnings report.

The multiyear designation as the preferred mobile phone distributor and service provider for A Wireless, Diamond Wireless, Go Wireless and Moorehead Communications is believed to be among Ingram’s most lucrative pacts in North America in the mobile device segment.

“This is a very significant win for the company,” said Damon Wright, executive director of investor relations. “At that kind of scale, we’re talking a million-plus devices in any given year.”

The consortium of Verizon dealers operates more than 1,750 retail locations.

Ingram will begin realizing revenue from the deal this quarter.

Basking Ridge, N.J.-based Verizon Wireless, a unit of Verizon Communications in New York, is the largest mobile network operator in the U.S., with 97.3 million subscribers through the end of the first quarter.

Ingram is the world’s largest distributor of computers, software and other technology products, with sprawling operations around the globe. But it wouldn’t have likely seeded the deal with the major Verizon dealers without its $840 million buy of Indianapolis-based BrightPoint Inc. in late 2012.

BrightPoint, which competes for the title of the world’s largest wireless device distributor, brought more than 25,000 customers and 100,000 distribution points across the globe.

The unit last year boosted Ingram sales by $4.5 billion and operating income of $46.5 million, fueling the company’s banner year. Ingram had record revenue of nearly $42.6 billion in 2013, up 12.4% from a year earlier. Profits were $371 million, an increase of 18.5%.

The deal with the Verizon dealers calls for Ingram’s mobility unit to also handle returns and logistics, device lifecycle management, and strategic sourcing, all services that carry higher margins than typical distribution.

“These services will bring higher value opportunities,” Wright said. “This deal is an excellent example of why we acquired BrightPoint.”

CloudBlue

Another recently acquired company—CloudBlue Technologies Inc.—also is expected to play a key role in the deal.

The suburban Atlanta company, which joined the Ingram fold after a deal in October, handles information technology equipment disposal for large banks, system integrators and other companies with thousands of devices and equipment.

CloudBlue wipes out sensitive data from devices and determines if they have value on secondary markets.

It has more than 1,000 data centers, retail and original equipment manufacturing customers and operates more than 40 offices around the globe.

“We’re trying to capture the whole life cycle of that device,” Monie told the Business Journal shortly after the acquisition.

The Verizon Wireless deal is the second significant contract the Ingram Mobility unit has recently landed since integrating BrightPoint under the fold.

In November, Ingram launched distribution services for Apple Inc.’s iPhone 4s, iPhone 5s, and iPhone 5c models, as well as related accessories, to its stable of resellers in Germany, France, Sweden and Spain.

The Cupertino-based consumer electronics company is perennially among Ingram’s largest business generators.

Distribution of Apple products accounted for about 10% of Ingram’s $10.4 billion in revenue in the recently ended quarter, according to filings with the Securities and Exchange Commission.

Palo Alto-based Hewlett-Packard Co. accounted for nearly $1.7 billion, or 16% of that total.

No other company accounted for 10% or more of revenue.

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