Ingram Micro in Irvine will be able to focus on its core areas of technology distribution and cloud services as the result of an agreement to sell a part of its business to French shipping giant CMA CMG in a deal valued at $3 billion.
CMA CMG said Dec. 8 it plans to acquire most of Ingram Micro’s Commerce & Lifecycle Services (CLS) business.
The transaction includes the Shipwire cloud-based logistics software platform, and the company’s technology forward logistics businesses in North America, Europe, Latin America and Asia-Pacific.
The CLS pieces being sold are primarily related to e-commerce fulfillment, for example lots of fashion companies and other brands that need the infrastructure to get their products to market use the services, according to Ingram Micro Vice President Damon Wright.
The CLS business’ annual revenue is estimated at around $1.7 billion this year, CMA, CMG said.
“This move allows Ingram Micro to focus on the growth and expansion of our core technology distribution and cloud services capabilities,” Wright told The Business Journal on Dec. 9.
The sale is expected to close in the first half of next year.
Core and Cloud
Wright said of the company’s core technology distribution and cloud services that “we will continue to invest in growing those businesses organically and through prospective acquisitions.”
“Our strategy remains continuing to grow these core businesses, particularly in areas of higher margin services and solutions,” he said.
Much of Ingram Micro’s core distribution business has historically operated on razor-thin margins. It has looked to diversify into more profitable areas of work, with cloud-based services becoming an increasing area of focus.
Busy Year
It’s the second big transaction involving Ingram Micro this year.
L.A.-based billionaire Tom Gores’ Platinum Equity in July acquired Ingram from the HNA Group of China for $7.2 billion.
Ingram had first-half net revenue in excess of $26 billion this year, potentially putting the company on track to exceed last year’s annual figure of $49.1 billion. Ingram is by far Orange County’s largest company by revenue.
It has more than 35,000 employees worldwide, serving 250,000 customers and partnering with 2,000 vendors, according to the company’s website.
Ingram Micro is one of the world’s largest wholesale distributors of technology products, distributing software and cloud products along with other tech items, while providing an array of related services and supply chain offerings.
The company says its “deep expertise” in technology solutions, mobility, cloud, and supply chain let its business partners operate efficiently and successfully.
“We will continue pursuing more opportunities to drive growth organically and through acquisitions in our technology solutions and cloud businesses,” Wright said.
Cloud still has a way to go to catch up to distribution. Wright said just a year ago that technology solutions and distribution accounted for more than $40 billion in revenue, or about 80% of the total.
Brazil’s BRLink
The Irvine firm’s also been buying of late.
Ingram Micro said Dec. 7 it had agreed to buy BRLink, a Brazilian managed services provider, for an undisclosed sum.
“Platinum is making good on its promise to invest in our growth and expand in key markets and in core product segments,” Wright said.
Tech website CRN.com said the sale to French shipping giant CMA CMG will provide Ingram Micro with “a big $3-billion war chest for further acquisitions and investments into its core technology business.”
