Santa Ana-based Ingram Micro Inc. received mixed reviews from analysts on its $840 million acquisition of wholesale distributor Brightpoint Inc. in early July.
Analyst Brian Alexander of St. Petersburg, Fla.-based Raymond James & Associates cited BrightPoint’s earnings and sales struggles, the sizable purchase price and the challenge of integrating BrightPoint operations in writing that the investment firm is “unconvinced this is the right time or the right price.”
Raymond James lowered its rating on Ingram shares to “market perform” from “strong buy.”
Sterne Agee Group Inc. maintained its buy rating on the stock.
“We view this deal favorably, as it greatly beefs up [Ingram’s] presence in the high-growth mobile and wireless space,” said Shaw Wu, a San Francisco-based analyst for the Birmingham, Ala.-based investment bank. “Moreover, it is accretive adding to its high-margin logistics business.”
About $550 million, or 10.6%, of BrightPoint’s $5.7 billion sales in 2011 were generated from its high-margin logistics business, Wu wrote in a research note.
Standard & Poor’s Inc. maintained its “BBB-” rating on Ingram. The rating indicates adequate capacity to meet financial commitments with the caution that adverse economic conditions or changing circumstances could weaken that position.
Ingram plans to finance its most expensive deal to date with cash and $190 million of BrightPoint debt.
Ingram has a $750 million revolving credit line and a $500 million accounts receivable line, with almost $1 billion in cash as of March 31. Ingram also secured an additional $300 million credit line after the deal was announced July 2.
Indianapolis-based BrightPoint, which has its U.S. headquarters in Indianapolis, perennially battles Miami-based Brightstar Corp. as the world’s largest wireless device distributor. About 90% of its annual revenue is derived from traditional distribution.
Finland-based Nokia Corp. and Research In Motion Ltd. in Canada accounted for almost half of the units BrightPoint handled in 2011.
Ingram is the world’s largest technology distributor with $36.3 billion in sales and $244 million in earnings last year.
MIPS Extension
Broadcom Corp. will pay Sunnyvale-based MIPS Technologies Inc. at least $26.5 million for continued access to the company’s patent portfolio.
The Irvine-based chipmaker—under the multiyear licensing extension—also will “provide other consideration” to MIPS relating to chip manufacturing processes, according to a recent filing with the Securities and Exchange Commission.
MIPS has licensed patents to Broadcom since 1998.
Its technology is used in digital televisions, set-top boxes, Blu-ray players, broadband equipment, Wi-Fi access points and routers, networking infrastructure, mobile communications and entertainment products.
Broadcom, which was MIPS’ largest customer in 2011, specializes in communication chips that go in tablets, smart phones, set-top boxes, broadband modems, networking gear and other products.
Broadcom is the biggest chipmaker based in Orange County, with about $7.4 billion in annual revenue.
MotionArtist
Comic book fans, artists and industry watchers were among the first to test Smith Micro Software Inc.’s much-hyped app that lets user create their own graphic novels.
The Aliso Viejo company debuted MotionArtist, its new comic creation app, last weekend in San Diego at the International Comic-Con 2012, the industry’s largest and most influential event.
“MotionArtist will change the way digital comics and graphic novels are created and shared,” said Steve Yatson, Smith Micro’s senior director of product marketing.
The company also planned to hold a massive scavenger hunt, an all-star panel of comic book creators and actors, and demos of its latest graphic products during the show.
Smith Micro makes software for cell phones and connecting mobile devices to wireless networks.
Data Center Pact
Printronix Inc. will move its information-technology infrastructure to a data center run by Latisys Inc.
Printronix will take up space at Latisys’ 93,000-square-foot data center at 17400 Von Karman Ave. near John Wayne Airport.
It joins other high-profile tenants at the data center, including Toshiba America Information Systems Inc. in Tustin; Cypress-based Mitsubishi Electric & Electronics USA Inc.; First Foundation Bank in Irvine; and Los Angeles-based apparel company Guess? Inc.
Englewood, Colo.-based Latisys will spend upwards of $60 million when it completes its three-phase project to gut and upgrade the data center. The company has more local space than any other data center operator here.
Printronix, which makes industrial printers and printing supplies for manufacturers and retailers, sold its 186,000-square-foot headquarters earlier this year to Newport Beach developer Irvine Company.
The company recently moved to a 94,000-square-foot building in the Irvine Spectrum near Barranca Parkway, taking a five-year lease from Irvine Co., according to industry sources and regulatory filings.
