Irvine-based electronics and technology distribution giant Ingram Micro Inc. is back in U.S. hands after five years.
It returns as a larger, more valuable and, execs say, a far more diversified technology company.
Tom Gores’ investment firm Platinum Equity of Los Angeles last week completed its $7.2 billion purchase of Ingram from China’s HNA Group, about seven months after the planned sale was first announced.
The sale marks a 20% return for HNA, which paid $6 billion for Ingram in 2016.
The Chinese firm reportedly had been looking to offload Ingram as early as 2018, a result of financial issues related to its parent company, not the Irvine firm.
Recent financial results point to Ingram’s internal growth over the course of HNA’s ownership.
Ingram, long OC’s largest company by revenue, reported $49.1 billion in net sales in the 2020 fiscal year. That’s roughly 14% more than what it made in 2015, its last full year as a public company.
Ingram is the largest technology distributor in the world. It offers technology and supply chain services that are used by many of the world’s most prominent technology companies, such as Apple, Cisco Systems, Hewlett-Packard, IBM, Microsoft and Samsung Electronics Co.
With more than 35,000 employees and operations in 60 countries, Ingram Micro said it serves more than 170,000 customers and partners with over 1,600 vendors.
Irvine Base Remains
While a majority of the company’s revenue is generated in a distribution industry that has notoriously razor-thin margins, in recent years it has focused on newer products and services, in particular cloud-based products that offer higher profits.
Those offerings saw more interest during the pandemic, and execs tell the Business Journal that there’s plenty more room for growth going forward under the new ownership structure.
“We believe we have tremendous opportunity for growth across all of our key lines of business: Technology Solutions, Cloud, and Commerce and Lifecycle Services,” Chief Executive Alain Monié said last week.
“We have been investing to expand our capabilities and offering in each (line), both organically and through M&A, and we expect to accelerate our growth with the support of Platinum’s substantial global resources.”
Platinum said last week that Monié will continue as CEO, “supported by his leadership team, and the company will continue to be headquartered in Irvine.”
Cloud Success
A few years ago, Monié turned over some of his duties related to the company’s core distribution services, to focus more on the cloud business and other higher-profit offerings.
Those efforts have proved both successful and prescient, according to both the CEO and Ingram’s new owners.
Ingram “has built strong capabilities in logistics services and cloud and hybrid cloud solutions. We’ve been methodical, adding capabilities through organic investment and M&A and we expect to accelerate those efforts with Platinum’s help and deliver an even higher growth trajectory,” Monié told the Business Journal via email.
“Ingram Micro plays a vital role helping companies innovate and adapt, which is especially important now as we continue to emerge from the pandemic,” Gores said July 7, in announcing the completion of the purchase.
“Corporate IT priorities are shifting, e-commerce is thriving, and the pace of digitization continues to accelerate, which makes the technology products, services and advanced solutions the company provides more important than ever,” Gores said.
Platinum Equity is a global investment firm with more than $25 billion of assets under management, and a portfolio of approximately 40 operating companies.
Next Steps
With access to Platinum’s financial and operational resources, Ingram “has significant attractive opportunities ahead,” Monié said.
“Our mandate does not change—we keep on delivering the exceptional experience our customer and vendor partners rely on every day,” Monié said.
The company will “stick to our strategic initiatives to broaden our services and solutions offerings,” and will continue to “accelerate our profitable growth.”
“In other words, we keep doing what we’ve been doing; it’s working!”
