Technology distributor Ingram Micro has agreed to be purchased by Tianjin Tianhai Investment Company and become part of HNA Group, the largest stakeholder of Tianjin Tianhai, in the latest acquisition deal in the IT sector.
Security and IT distributor Ingram Micro has agreed to be purchased by Tianjin Tianhai Investment Company and become part of HNA Group, the largest stakeholder of Tianjin Tianhai, in the latest acquisition deal in the IT sector.
Under the deal, announced on February 17, Tianjin Tianhai will pay US$38.90 per share to acquire Ingram Micro, representing a premium of approximately 39 percent over the average closing share price of Ingram Micro for the 30 trading days ended February 16, 2016. The all-cash transaction amounts to an equity value of approximately $6 billion.
According to a news release from Ingram Micro, the company is expected to remain headquartered in Irvine, California, and its executive management team will also remain, with Alain Monié continuing to lead as CEO. All Ingram Micro lines of business and all regional and country operations are expected to continue unaffected.
The deal is the latest in a slew of purchases made by Chinese companies of U.S. tech firms in the face of China’s slowing economic growth. But for Ingram Micro and HNA Group, the deal is a highly strategic move considering the synergy it creates.
For HNA, it can leverage the extensive international supply chain network of Ingram Micro, which, founded in 1979, is one of the largest distributors of personal computers and other technology products. The company has also recently branched into a range of higher-margin professional services.
“Ingram Micro has clearly established itself as a leading distributor and global provider of IT products and services,” said Adam Tan, Vice Chairman and CEO of HNA Group. “After the transaction, Ingram Micro would become the largest member enterprise of HNA Group in terms of revenue, and facilitate the internationalization process of the group. With the help of Ingram Micro, HNA Group would have access to business opportunities in emerging markets, which have higher growth rates and better profitability. Furthermore, the addition of Ingram Micro would help the logistics sector of HNA Group transform from a logistics operator to a supply chain operator, and provide one-stop services while improving efficiencies."
For Ingram Micro, it will become part of a major, Fortune Global 500 enterprise with extensive reach in the vast Chinese market. “As a part of HNA Group, we will have the ability to accelerate strategic investment, as we continue to capitalize on the constant evolution of technology and emerging trends by adding expertise, capabilities and geographic reach,” said Ingram Micro CEO Alain Monié. “Additionally, Ingram Micro will now be part of a larger organization that has complementary logistics capabilities and a strong presence in China that can further support the growth and profitability objectives of our vendor and customer partners.”
In conjunction with this announcement, Ingram Micro is suspending its quarterly dividend payment and its share repurchase program prior to the closing of the transaction.
The transaction is subject to regulatory approvals in various jurisdictions, as well as the approval of Ingram Micro's and Tianjin Tianhai's stockholders and the satisfaction of other customary closing conditions.