Information technology distributor Ingram Micro Inc. (IM: Quote) has agreed to acquire Brightpoint, Inc. (CELL: Quote), a provider of device lifecycle services to the wireless industry, for $9 per share in cash. The transaction is valued at about $840 million, including Brightpoint's estimated net debt of $190 million on June 30.
The offer price marks a 66 percent premium to BrightPoint's closing stock price on June 29. Slated for a year-end close, the deal requires the approval of a majority of BrightPoint's outstanding shares at a special meeting expected in the third quarter.
BrightPoint generated $5.2 billion in revenues in 2011, of which nearly $550 million was from unique value-added logistics services.
The combination would create a leading global provider of device lifecycle services and solutions for the mobility industry. Together, the two firms will have good customer reach.
Ingram Micro's president and CEO Alain Monie said, "BrightPoint's 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 lifecycle services and solutions."
Ingram Micro expects annual cost synergies and efficiencies of $55 million by 2014. 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 company expects to fund the transaction with existing cash and debt facilities. It has obtained a $300 million debt commitment from Morgan Stanley.
BrightPoint's current Regional Presidents, Mark Howell, Bruce Thomlinson and Anurag Gupta, and Chief Financial Officer Vincent Donargo have committed to senior roles within the new organization after the deal is complete.
Separately, BrightPoint withdrew its full year 2012 financial expectations. The firm now sees second-quarter revenue in the range of $1.25 billion to $1.35 billion, loss from continuing operations of 2 cents per share, and adjusted income from continuing operations of 14 cents per share.
On average, 10 analysts polled by Thomson Reuters expect earnings of $$0.22 per share for the quarter. Analysts' estimates typically exclude special items. Wall Street looks for revenues of $1.41 billion.
Ingram Micro shares closed higher by 2.3 percent at $17.47 on Friday, on a volume of 1.26 million shares. Brightpoint shares closed at $5.41, down 2.70 percent, on 1.5 million shares.
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by RTT Staff Writer
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