(This story has been updated with additional input from Ingram executive Paul Bay.)
Distribution giant Ingram Micro has been acquired from its current owner, Chinese conglomerate HNA Group, by private investment firm Platinum Equity.
The deal, which is valued at $7.2 billion, is expected to close in the first half of 2021.
“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 in a press statement. “We have the resources and the experience to help the company pursue an aggressive agenda of growth and transformation.”
Alain Monié will remain Ingram’s CEO after the acquisition closes, and the company’s headquarters will remain in Irvine, Calif.
“Platinum’s sector expertise, global operating capabilities and financial resources make it the ideal partner,” said Monié in prepared remarks. “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.”
Paul Bay, who has been Ingram’s executive vice president and president of global technology solutions since January, will also remain with the company under its new ownership.
“Platinum shares Ingram Micro’s focus on associate and partner experience, and they recognize the importance of relationships and partnering to do more and deliver value,” said Bay in remarks emailed to ChannelPro. “I believe this partnership with Platinum will allow us to become an even more indispensable business partner to our channel partners globally. My team and I are looking forward to partnering with Platinum to accelerate our growth plans, which are to win together with partners, deliver a better customer experience around technology and deliver more high value, high growth business solutions. I’m in this for the long-term to support our partners with giving businesses more ways to run better, grow faster and do more for the customers they serve.”
An early leader in the shift among big-time distributors from the traditional “pick, pack, and ship” business model toward emerging markets like cloud computing and, more recently, the Internet of Things, Ingram serves over 250,000 customers and partners with more than 2,000 vendors. It has over 350,000 employees in 60 countries.
The company exceeded $47 billion in revenue during its 2019 fiscal year, which ended last December. Despite tumultuous market conditions this year that have roiled global economies generally and the IT industry specifically, the distributor grew profits 2.1% in its fiscal third quarter, which concluded September 26th.
Founded in 1995, Platinum currently has some $23 billion in assets worldwide and a portfolio of approximately 40 companies, including performance marketing software maker Centerfield and freight bill processor Data2Logistics. It had a holding in data center infrastructure vendor Vertiv as well until early this year.
“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 in prepared remarks. “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.”
Reports of a pending a $7+ billion acquisition deal between Platinum and HNA have been circulating since August. HNA, which purchased Ingram for some $6 billion in 2016, has struggled to make bond payments associated with the massive debt it accumulated through a variety of investments in recent years. The company’s chairman has been barred by a Chinese court from making further purchases since September.
“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, in supplied remarks. “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.”
In June, private investor Apollo Global Management completed its $6 billion acquisition of Ingram competitor Tech Data, and announced intentions to spend $750 million on efforts aimed at boosting operational efficiency and agility.
