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Ingram Micro crams BrightPoint down gullet for $840m

Broadline bigboy wolfs wireless widgetry wares

Broadline behemoth Ingram Micro has coughed $840m (£535.7m) for specialist wireless device and services distie BrightPoint, the companies confirmed this morning.

Industry chatter in recent weeks pointed toward Ingram being in talks to snap up Specialist Distribution Group, a mid-market infrastructure distributor.

The deal with BrightPoint clearly takes Ingram into the wireless device market but the question is whether this signals a wider shopping spree that the firm is embarking upon.

Under the terms of the agreement, Ingram has stumped up $9 per share for BrightPoint, representing a 66 per cent premium on the stock's closing price on 29 June, and assumed $190m of BrightPoint's debts.

The buy is expected to be funded by Ingram's existing credit facilities and available cash balances, the firm said. It hopes to see "cost synergies" - PR-speak for cost savings - in excess of $55m by 2014.

"Expanding our presence in the mobility market has been a focus on Ingram Micro and the acquisition of BrightPoint accomplishes this to an extent that would have been challenging to achieve on our own," said Ingram president and CEO Alain Monié in a statement.

Set up in the US in 1989, BrightPoint turned over $5.2bn in sales during calendar 2011, up 44 per cent, of which $544m pertained to logistics services. It made a net profit of $15m.

The distributor employs 4,000 people in facilities across 24 countries.

BrightPoint claims to have 25,000 B2B customers worldwide and flogged more than 112 million devices in its previous fiscal. It claims to offer device lifecycle management from logistics, demand generation and configuration.

Device manufacturers in its portfolio includes RIM, Samsung and Google while network operators it sells include O2 and Vodafone.

Ingram reckons the "converging telecommunications, computing and media" will lead to cross and up-sell deals across the respective customer bases.

BrightPoint chairman and CEO Robert Laikin, said "financial strength, scale and broad geographic reach" will be gained from Ingram.

Execs at the wireless devices distie have already agreed to senior roles in the merging organisations including the regional presidents and CFO. Laikin will act as a senior adviser to Ingram boss Monié.

The deal needs to get the go ahead from BrightPoint shareholders at a meeting set to take place in Q3, and the transaction is expected to close before the end of the year. ®

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