Ingram Micro Inc., one of the largest technology distributors of wholesale products and supply chain solutions has purchased BrightPoint Inc. for approximately $650 million in cash.
The acquisition of the wireless device distributor is reported to become an avenue for Ingram Micro to expand their business through mobile and wireless carrier technology.
BrightPoint generated $5.2 billion in revenue last year 2011. Specializing in device lifecycle services and solutions in the mobile sector, the company may be able to offer the mobile expertise Ingram Micro Inc. currently lacks. Indiana-based BrightPoint Inc. distributes products developed by companies including Apple and LG Electronics to mobile network operators and wireless technology manufacturers.
It currently operates in over 35 countries.
The company expects to fund the transaction with existing cash and debt facilities & reserves. The deal is valued overall at about $840 million, including $190 million of BrightPoint's estimated debt.
Ingram Micro chief executive officer Alain Monie said:
"Expanding our presence in the mobility market has been a focus of Ingram Micro and the acquisition of BrightPoint accomplishes this to an extent that would have been challenging to achieve on our own.
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."
A weakening personal computer market has spurred on the distributor to look for new avenues to expand their growth margins -- and in a modern market dominated by smartphone and tablet technology, the PC market may be in danger of falling behind.
Ingram Micro shares closed at $17.47 on Friday on the NYSE. The company expects the acquisition to result in annual cost synergies and efficiencies of over $55 million by 2014.
Ingram Micro is not the only PC maker and distributor looking to claim a place in the mobile technology sector. Arrow Electronics Inc. stated in April it planned to purchase Altimate, a distributor of computing services in Europe.