Distributor Ingram Micro Inc. announced Monday it has signed a definitive agreement to acquire Brightpoint Inc., Indianapolis, Ind., a provider of mobile device lifecycle services, for $840 million, boosting its position in the mobility market following the spring launch of Ingram Micro Mobile.
Ingram Micro will acquire all outstanding shares of BrightPoint common stock for $9 per share in cash. The transaction is valued at $840 million, including the value of approximately $190 million of BrightPoints estimated debt (net of cash), as of June 30, 2012.
In fiscal 2011, BrightPoint generated $5.2 billion in revenues. The company operates facilities in 24 countries, with sales in more than 75 countries. BrightPoint serves more than 25,000 business-to-business customers and handled more than 112 million wireless devices in 2011.
BrightPoint has more than 4,000 employees, as well as a significant number of temporary staff. Staff reductions were not disclosed, but synergies were expected from the deal. Brightpoint Chairman and CEO Robert Laikin will stay on as a senior advisor to Ingram Micro President and CEO Alain Monié. In addition, several other Brightpoint executives will have senior roles at Ingram Micro, including CFO Vincent Donargo and regional presidents Mark Howell (Americas), Bruce Thomlinson (APAC) and Anurag Gupta (EMEA).
BrightPoint offers more than 110 outsourced IT services, such as distribution channel management, procurement, inventory management, reverse logistics and repair services, software loading, kitting and customized packaging, fulfillment, product customization and e-business solutions.
Ingram Micro is a global IT distributor operating in 145 countries, offering resellers outsourced logistics, technical and financial support, managed and cloud-based services, and product aggregation and distribution. Its mobile business unit, Ingram Micro Mobile, provides a single source for technology, services and support needed to sell mobile devices, accessories and services, including activation from major wireless carriers and secondary mobile operators. It also has a dedicated team of mobile sales (inside and field), marketing, software licensing and cross-trained technical support experts. Its logistics services include software, application and firmware load; packaging, hard and soft bundling and core logistics.
BrightPoints offerings are highly complementary to both our logistics and distribution businesses, which will enable us to go to market with the leading portfolio of mobility device life-cycle services and solutions,” said Monié in a press statement. “Our expanded geographic footprint and strong financial position create growth opportunities for the combined company and give vendors, network operators and mobile virtual network operators, partners and customers one-stop access to one of the widest ranges of mobility and technology products, services and solutions.”
Monié said Ingram Micro has been focused on expanding its offerings in the mobility market, noting that the acquisition of Brightpoint accomplishes that which would have been challenging to achieve organically.
Ingram Micro plans to fund the transaction with existing credit facilities and available cash balances. The company has obtained a commitment for a $300 million debt facility to be provided by Morgan Stanley Senior Funding Inc., which would supplement its existing committed debt capacity. Ingram Micro expects to realize annual cost synergies and efficiencies in excess of $55 million by 2014, and the transaction is expected to be accretive to earnings per share by at least 18 cents in 2013 and 35 cents in 2014, excluding one-time charges and integration costs.
The transaction requires approval of a majority of BrightPoints shareholders at a special meeting, which is expected to take place in third quarter. Closing is conditioned on customary regulatory approvals, but is expected before the end of the year.