Ingram Micro Corp., the electronics and technology distribution colossus, plans to go public with an initial public offering that reportedly could raise more than $1.25 billion.
Owned by billionaire Tom Gores’ Platinum Equity, 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.
Ingram’s Sept. 30 filing with the Securities and Exchange Commission (SEC) came as no surprise since the company told the SEC two years ago it was weighing a public listing.
While the Irvine-based company gave no estimate of the size of the planned offering on the New York Stock Exchange, others were quick to come up with estimates.
Renaissance Capital estimated the IPO could raise more than$1.25 billion. Bloomberg News was more conservative but repeated an earlier prediction of more than $1 billion, with the company seeking a valuation of as much as $10 billion.
Ingram Micro in-tends to use the proceeds from the offering to repay a portion of a term loan facility, the Sept. 30 filing shows. There was almost $1.2 billion outstanding as of last month, according to the filing.
Ingram Micro, which first went public in 1996, is generally ranked as the world’s largest technology distributor by revenue. It distributes computers as well as software and cloud products along with other tech items, while providing an array of related marketing services and supply chain offerings for both value-added re-sellers and tech suppliers.
Ingram Micro, with sales operations throughout the world and and 134 global logistics and service centers, has more than 1,500 vendor partners and more than 161,000 customers.
Valued at 20% of Sales
It is expected to be the largest IPO for an OC company since electric vehicle company Rivian Automotive Inc. brought in some$13.7 billion in proceeds in 2021 (Nasdaq: RIVN).
By way of comparison CG Oncology Inc. (Nasdaq: CGON), a biotech focused on bladder cancer, raised $380 million in its IPO, pricing 20 million shares at $19 in January.
Ingram Micro’s annual 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.
However, Ingram Micro is going public at a time when headwinds are buffeting its model.
Its 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.
When it was publicly traded, it wasn’t as highly valued as other tech companies on Wall Street.
It seems to have the same problem nowadays – the notorious thin margins common to a distributor. While famous tech companies like Apple Inc. and Alphabet Inc. often have profit margins above 25%, Ingram Micro’s adjusted profit margin has ranged from 2%in 2019 to 2.3% 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, ac-cording to a regulatory filing.
While it might reach a $10 billion valuation, that would only be about 20% of annual sales.
A Distributor in the Cloud
Furthermore, the tech world has moved away from physical distribution to cloud-based systems.
Ingram Micro has been trying to pivot to provide such services by making more than 40 acquisitions worth $2 billion since 2012.
These acquisitions 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,” the company’s Sept. 30 filing said.
“The anything-as-a-service (“XaaS”) market has now been a rapidly expanding market and a key growth driver for several years, leading to our accelerated development of highly integrated solutions, services and marketplaces.”
The company in 2010 launched a “cloud marketplace,” where software vendors can connect with thousands of customers, who in turn support millions of end users. The com-pany calls it “the world’s largest cloud ecosystem” with more than 200 cloud solutions, 29 marketplaces and 36 million seats for more than 33,000 customers.
It’s built a proprietary CloudBlue digital commerce platform and in 2022 launched In-gram Micro Xvantage, a fully automated, self-learning and digital platform.
“We believe that our customers will increasingly experience a ‘single pane of glass’ through which we offer a full menu of IT de-vices, software solutions, cloud-based subscriptions and technology services across hundreds of vendors and brands as we mi-grate our cloud marketplace and other marketplaces to Ingram Micro Xvantage,” the filing said.
It aims to provide enhanced security, saying the market is expected to grow to $323 billion in 2027, an 11% compound annual growth rate from 2023.
It sees opportunity in the number of connected devices, citing 46 billion IoT devices by 2025, generating 67 zettabytes of data.
It’s also saying artificial intelligence will benefit distributors in two ways: remove friction in the ordering process and personalize the customer experience by leveraging predictive models to generate insights and rec-ommendations; and drive accelerated demand for PCs, datacenter equipment, AI-enabled software and many other applications.
200K-SF Lease to Expire in 2026
There was no immediate word on how the public listing might have an impact on the company’s operations in Irvine.
The company leases more than 200,000 square feet at its headquarters in Irvine; the lease is scheduled to expire on July 31, 2026.
News of Ingram Micro’s planned listing came with a caution from the company itself.
“The offering is subject to market conditions, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size, price or other terms of the offering,” Ingram Micro said in a Sept. 30 press release .
Ingram Micro intends to list its common stock on the NYSE under the ticker symbol “INGM.”
Morgan Stanley, Goldman Sachs & Co. LLC and J.P. Morgan are acting as joint book-running managers for the proposed offering and as representatives of the under-writers for the proposed offering.
Ingram Micro’s Story Stretches Back to Teachers, Tennessee
Ingram Micro traces its roots to a family famous in Tennessee and two school-teachers in Southern California.
Husband-and-wife team Geza Czige and Lorraine Mecca, who were both teachers at that time, in 1979 founded Micro D Inc. to distribute what was quickly becoming an exploding industry –personal computers.
The company rapidly expanded nation-wide and went public in 1983, reaching$553 million in sales in 1988.
In 1989, Nashville, Tennessee-based In-gram Industries, which became known as a distributor of books and later software and computers, acquired all the stock of Micro D.
Ingram Industries can trace its roots to 1830 when Orrin Henry Ingram was born and was involved in the lumber and shipping business in the Midwest.
In the 1930s, Hank Ingram moved to Nashville where the company expanded into several different fields, becoming known for refining petroleum to shipping barges to distribution, including books and then computer products in the 1980s.
Ingram Industries merged the two former competitors together to create the microcomputer industry’s first $1 billion computer products wholesale distribution company Ingram Micro D, with head-quarters in Santa Ana. Officials dropped the “D” from the company’s name in 1991.
Ingram Micro went public in 1996, raising about $392 million in an IPO and reaching a market cap around $3.5 billion. The Ingram family retained about 75% of its voting stock.
It went private in late 2016 when it was acquired by China’s HNA Group for $6 billion.
Platinum Equity purchased it for $7.2 billion in 2021 after months of conflicting rumors about its future.
Nowadays, Ingram Industries still exists. It is the 222nd largest private company in America with an estimated $2.7 billion in annual sales, according to Forbes.
The company has a variety of businesses from river barges to ironically supplying Apple Inc. with electronic books. The Ingram family is worth about$5.5 billion, according to Forbes.
