Private equity, Enterprise, IT distribution, Content

Ingram Micro’s Next Majority Owner: RRJ Capital?

RRJ Capital appears poised to acquire Ingram Micro, essentially buying majority control of the distribution giant from China's HNA Group in a pending deal that could be firmed up within days, according to Reuters.

Tianjin Tianhai acquired Ingram Micro in 2016 for $6 billion in cash and tucked the business into HNA Group, a Chinese conglomerate focused on aviation, tourism and logistics. Ingram has performed well in recent years, but parent HNA Group has faced various debt and financial pressure over the past year.

According to Reuters: An investment group led by RRJ capital will "inject funds via an HNA convertible bond that will give it control of Ingram Micro. The deal is set to be firmed up in a few days."

Rumors about HNA Group potentially selling Ingram Micro to private equity firm Apollo Global Management surfaced in December 2018 but then quieted down shortly thereafter.

Fast forward to present day. RRJ Capital and affiliated investors apparently are looking to buy an HNA bond that can be converted into close to 50 percent of Ingram Micro's shares, Bloomberg reports.

Ingram, RRJ and HNA Group did not comment for  the report. ChannelE2E has not independently confirmed the report.

For its first quarter ended March 31, 2019, Ingram Micro generated:

  • sales of $11.58 billion, down 2 percent from $11.76 billion in the first quarter of 2018.
  • net income was $77 million, compared to $47 million in the first quarter of 2018.

The overall IT distribution market has performed well amid major market shifts toward cloud, monthly recurring revenue, subscription services, and IoT (internet of things) endpoints and sensors. Ingram is scheduled to host an Internet of Things Summit this September in Southern California.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.