Platinum Equity will pay $7.2 billion for tech distributor
Global technology distributor Ingram Micro is being bought by private equity firm Platinum Equity for $7.2 billion in a deal that has been in the works for at least four months.
The Lowdown: The acquisition, announced Wednesday, will take Ingram Micro off the hands of HNA Group, a Chinese conglomerate that bought the distributor for $6 billion in 2016 but has been struggling financially in recent years.
The Details: Speculation about Platinum’s interest in Ingram Micro began to surface this summer, with news reports in August describing the negotiations in the late stages and rumors that other companies possibly were interested in buying the company.
With Ingram Micro, the private equity firm is getting a company with more than $47 billion in annual revenue and a wide and deep reach in the IT industry, with more than 250,000 customers and more than 2,000 industry partners, a lineup that includes most of the top tech companies. The Irvine, California-based distributor – with more than 35,000 employees and operations in 60 countries – has a focus on such key IT areas as the cloud, mobility, technology lifecycle, tech solutions, and the supply chain.
Among its offerings is a Cloud Marketplace where partners like MSPs and Independent Software Vendors (ISVs) can buy and sell a broad array of cloud services, access channel and go-to-market support, streamline back-office operations, and leverage a large cloud ecosystem.
Alain Monié, who has been with Ingram Micro since 2003 and its CEO since 2010, will continue in the same position after the deal closes.
Platinum was founded in 1995 and has since completed more than 300 acquisitions in a range of market sectors beyond technology, including manufacturing, transportation and logistics, media and entertainment, and telecommunications. It currently has a portfolio of about 40 companies and manages about $23 billion in assets.
The deal is expected to close in the first half of 2021 following the approval of HNA shareholders and regulators.
The Impact: The acquisition will give Ingram Micro a more stable financial home. HNA has a broad portfolio of businesses in such areas as airlines, banks, and hotels and as of earlier this year was carrying a debt of more than $86 million. Many of the industries in the company’s portfolio have been hit hard this year by the COVID-19 pandemic, which has curtailed travel around the world.
The Buzz: “Ingram Micro is an industry leader, one of the largest companies in the world, and will be a cornerstone investment in our portfolio,” said Platinum Equity Chairman and CEO Tom Gores. “We have the resources and the experience to help the company pursue an aggressive agenda of growth and transformation.”
“We know Ingram Micro and the industry very well and have been investors in the technology and IT distribution and solutions sectors for more than a decade,” said Platinum Equity Partner Jacob Kotzubei, whose team has led multiple technology transactions, including Platinum Equity’s recent investment in Vertiv. “We have been pursuing this opportunity for a while and have been impressed by the company’s ability to thrive while continuing to navigate these fluid and challenging times. We will work closely with the Ingram Micro leadership team to sustain that momentum and build on the company’s success.”
“Platinum’s sector expertise, global operating capabilities and financial resources make it the ideal partner,” Monié said. “Teaming with Platinum provides an opportunity to further strengthen our competitive advantage in the cloud, speed our digital transformation, and accelerate the expansion of our solutions and services portfolio, particularly for high value markets. We will also be able to broaden our geographic reach even faster, while penetrating new industries and verticals. We will maintain a strong balance sheet and will gain additional flexibility and resources to execute on our long-term strategic objectives. HNA has been a good partner for Ingram Micro, enabling us to continue to innovate and expand our global businesses. We look forward to the opportunity to accelerate this trajectory with Platinum.”
“We are pleased to have reached an agreement that delivers a strong return on HNA’s investment while ensuring that Ingram Micro has a partner committed to investing in its future growth,” said Wang Duan, president of HNA Group North America. “We wish Alain and his team well and are confident that Ingram Micro will continue to succeed in this exciting new phase of growth and development under Platinum’s ownership.”
“Ingram Micro’s scale, diverse customer and vendor relationships, and track record for innovation, create the perfect platform for us to help accelerate growth, both organically and through additional M&A,” Platinum Equity Managing Director Matthew Louie said. “It also provides exciting opportunities in one of the fastest-growing sectors in technology as corporations continue to migrate to cloud or hybrid solutions.”