Handshake Partnership Deal

Ingram Micro Buyout, Company Sale: Now Official

Dec 4, 2016 by Joe Panettieri
Alaine Monie

Alain Monie

Ingram Micro‘s (IM) $6 billion sale to HNA Group and Tianjin Tianhai will be completed on or about Monday, December 5, according to a December 2 SEC filing. The deal, which unites Ingram with a Chinese logistics giant, has faced and cleared multiple regulatory hurdles since the buyout was announced in February 2016.

Updated December 6, 2016, 8:05 a.m. ET: Ingram has announced a new CFO, new general counsel and two boardroom updates as part of the finalized sale.

Ingram Micro CEO Alain Monie and Executive VP Paul Bay both said the buyout will accelerate the distributor’s business moves going forward. The reason: Ingram will become privately held and free of Wall Street’s quarterly earnings pressures. Moreover, the buyout doesn’t involve any product or service overlap — which means Ingram won’t suffer from any M&A alignment or consolidation issues, Monie indicated. The statements surfaced during Ingram Micro ONE — a major partner conference in Las Vegas last week.

A December 2, 2016, SEC filing essentially guarantees that the buyout will be finalized on our about December 5. The filing stated:

On December 2, 2016, Ingram Micro Inc. (“Ingram Micro”) announced that it has been informed by representatives of HNA Group and Tianjin Tianhai Investment Company, Ltd. (“Tianjin Tianhai”) that approval from China’s State Administration of Foreign Exchange (SAFE) has been obtained with regard to the equity portion of the aggregate merger consideration to be funded by Tianjin Tianhai in connection with the Agreement and Plan of Merger, dated as of February 17, 2016 (as amended on November 10, 2016), among Ingram Micro, Tianjin Tianhai and GCL Acquisition, Inc. The parties expect the merger to be completed on or about December 5, 2016 (subject to the satisfaction of the conditions to the closing that can only be satisfied at the closing).”

Changing Distributor Landscape

The IT distribution market is evolving in multiple ways. Some distributors are tucking strategic acquisitions into their operations. Others are extending into sister markets like telecom solutions. All are striving to unlock cloud services opportunities.

While Ingram prepares to go private under new ownership, rival Tech Data is buying Avnet Technology Solutions. That deal involves some overlapping strategies — particularly cloud services. But Tech Data also will gain international and enterprise relationships that it currently lacks.

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