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Ingram Micro To Become Leading Provider Of Mobility Products, Services And Solutions With Acquisition Of BrightPoint

Stocks in this article: CELL IM

BrightPoint, established in 1989 and with corporate offices in Indianapolis, generated $5.2 billion in revenues, of which nearly $550 million was from unique value-added logistics services, and total gross margin of approximately 7.2 percent of revenues for the 2011 fiscal year.  The company employs approximately 4,000 people and operates facilities in 24 countries, with sales in more than 75 countries around the world.  BrightPoint serves more than 25,000 B2B customers with over 100,000 points of sale across the globe and handled more than 112 million wireless devices in 2011.

BrightPoint founder, chairman and chief executive officer Robert J. Laikin commented: "The transaction with Ingram Micro will deliver significant value to our shareholders and will enable us to accelerate our global growth strategy.  This powerful combination will also provide compelling opportunities for BrightPoint's vendor partners, customers and employees to benefit from the financial strength, scale and broad geographic reach of the world's largest technology distribution company.  This is the right time for this transaction. I believe strongly that Ingram Micro is the best partner for our business and employees going forward and I am excited at the prospect of BrightPoint becoming part of a Fortune 100 company."

"Ingram Micro and BrightPoint share a common culture," said Ingram Micro chief operating and financial officer Bill Humes. "We admire the in-depth industry expertise and enthusiasm of the BrightPoint team and their excellent long-term relationships with customers, vendor partners, network operators and mobile virtual network operators.  The mobility industry is forecasted to grow faster than other technology sectors, driven in-part by exponential growth in the smartphone and tablet segments due to the ever-increasing demand for access to data anytime, anywhere and on any device.  Additionally," Humes said, "the convergence of telecommunications, computing and media is driving strong demand and should lead to cross-sell and up-sell opportunities, as our respective customer bases continue to converge.  Together we expect to capitalize on this growth and generate benefits for our combined vendors, partners, customers, associates and shareholders greater than either company could on its own."

Ingram Micro expects to fund the transaction with existing credit facilities and available cash balances.   Ingram Micro 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 following members of BrightPoint's senior management team have committed to senior roles within the new organization after the acquisition is complete: existing Regional Presidents, Mark Howell (Americas), Bruce Thomlinson (APAC) and Anurag Gupta (EMEA), and Vincent Donargo, BrightPoint's Chief Financial Officer.  In addition, Robert Laikin will serve in a senior advisory role to Alain Monie.

The transaction requires approval of a majority of BrightPoint's outstanding shares at a special meeting, which is expected to take place in the 2012 third quarter. Closing of the transaction is also conditioned on customary regulatory approvals. The transaction is expected to close before the end of the year.

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