Ingram Micro Holding Corp., the electronics and technology distribution colossus, has made its long-awaited return to public trading some eight years after going private.
The shares jumped as much as 17% on the first day of trading on Oct. 24, eventually scaling back to $24.60 apiece for a 12% increase (NYSE: INGM).
“It’s a good time to be back in the public market, for sure,” Ingram Micro CFO Mike Zilis told the Business Journal.
The debut makes Irvine-based Ingram Micro the largest company by sales with headquarters in Orange County. Its $5.8 billion market cap also ranks it as the second most valuable publicly traded tech company here, trailing only chipmaker Skyworks Solutions Inc.
It’s also a comeback for Ingram Micro, which traces its beginnings to Santa Ana in 1979. Ingram previously went public in 1996 and was taken private in 2016 by China’s HNA Group for $6 billion.
Tom Gores’ Platinum Equity bought Ingram Micro in 2021 in a $7.2 billion deal. Platinum will control nearly 90% stake in the company, regulatory filings show.
Ingram Micro, led by CEO Paul Bay, listed its common stock on the New York Stock Exchange under the ticker symbol “INGM.”
“We were well over-subscribed, and we got great investor response about the opportunity that lies in front of us,” Bay told Bloomberg News in an interview.
Warning Signs on Sales, Debt
Ingram Micro is generally ranked as the world’s largest technology distributor by revenue.
Ingram Micro already dwarfs sales of other local private firms, posting more than $48 billion in net revenue last year and a global workforce of more than 24,000.
Its sales are more than twice the next largest private company with headquarters in Orange County – Irvine-based Allied Universal, the world’s largest private security firm, which last year posted revenue of $20.7 billion.
While public trading is a major step forward for Ingram and Orange County’s tech sector, there are several warning signs.
Bloomberg News had previously reported the listing could have raised more than $1 billion, with the company possibly valued at as much as $10 billion – far more than was achieved.
Earlier this month, Seeking Alpha analyst Donovan Jones wrote: “The company is producing declining revenue, lower gross profit, and shrinking margins, with a high debt load typical of private equity-owned firms at IPO.”
Ingram Micro’s revenue has declined for two straight years, from $54.5 billion in 2021 to $50.8 billion in 2022 and $48.1 billion in 2023.
Ingram Micro disclosed net income of $104 million on net sales of $22.9 billion in the 26 weeks ended June 29, versus $129 million in net income on net sales of $23.1 billion in the same period a year earlier, according to a regulatory filing.
As is typical of most distributors, Ingram Micro’s adjusted profit margin is small, ranging around 2%.
The initial public offering raised $409 million, which will be used to repay debt.
No Plans to Leave 200K-SF HQ in Irvine
Zilis says Ingram Micro is firmly rooted in Irvine with no plans to move elsewhere.
The company leases more than 200,000 square feet at its headquarters in Irvine; the lease is scheduled to expire July 31, 2026.
In an age where distribution is increasingly occurring in the cloud rather than through physical products, Ingram Micro is attempting to pivot into cloud-related services.
It has made more than 40 acquisitions since 2012 that have “focused on creating a one-stop-shop experience for our thousands of customers to seamlessly pro-cure and manage a comprehensive suite of technology solutions and services,” according to a Sept. 30 regulatory filing.
Ingram Micro Bullish on OC Workforce
Ingram Micro Holding Corp., fresh from its debut on the New York Stock Exchange, says it’s recruiting and growing at its Irvine headquarters.
“We still have 800 associates in the Orange County area alone,” Chief Financial Officer Mike Zilis told the Business Journal on Oct. 24, the first day of trading on the New York Stock Exchange.
They are part of the 24,000 strong global workforce that’s becoming “more efficient and able to drive more value across the chain.”
He says OC has “been a fantastic market for us and we continue to recruit and grow there.”
Zilis himself was in New York to ring the opening bell at the NYSE. Zilis notes that the return to the market came about eight years after the company was taken private.
“It’s been a nice eight years of evolution where we’ve been able to invest quite a bit,” he said.
Cloud Impact, $600M Invested
Zilis says that the move to the cloud is an opportunity or Ingram Micro.
“We’ve invested for more than a dozen years into cloud, invested $600 million in fact over that period of time to build out our cloud platform” he said.
Cloud has “high double-digit margins,” he said.
“We continue to work and grow with all of the cloud vendors.”
He acknowledged that the “‘distribution piece of business,” the company’s core sector, has small margins.
But that tight margin “makes us constantly optimizing” to reach a profit.
Management Stays the Same
The company will definitely stay in Irvine, where it has been “entrenched for so long,” said Zilis, who has been with the company for 18 years.
“The management team stays exactly the same,” Zilis said, including himself and CEO Paul Bay.
While Platinum Equity will keep a nearly 90% share of the company, that will possibly change over time, according to Zilis.
“As we get into 2025, I think there will be mechanisms for them to continue to move more shares out into public float,” the Ingram Micro CFO added.
