Platinum Equity has agreed to acquire Ingram Micro, a distributor of information technology products, from HNA Group, in a transaction valued at $7.2 billion.
Ingram Micro’s products include desktop, laptop and mobile computer systems; audio and video devices; monitors and displays; data capture and point of sale devices; cybersecurity; cables; and a wide range of additional devices and accessories. The company has more than 2,000 vendors including Acer, Apple, Cisco, Citrix, HP, IBM, Lenovo, Microsoft, Samsung, and VMware.
Ingram Micro operates 190 distribution and logistics centers throughout North America, Europe, the Middle East, Africa, Latin America and Asia Pacific that serve more than 250,000 customers in just over 160 countries.
“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 Jacob Kotzubei, a partner at Platinum. “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.”
Ingram Micro was founded in 1979 as Micro D, Inc. by husband and wife team, Geza Czige and Lorraine Mecca. The company was acquired by Ingram Industries in 1989 and went public as Ingram Micro in 1996. HNA Group, through Tianjin Tianhai Investment, acquired Ingram Micro in December 2016 for $6 billion. Today, Ingram Micro, led by CEO Alain Monié, has more than 35,000 employees and is headquartered in Irvine, California.
“Ingram Micro is an industry leader, one of the largest companies in the world and will be a cornerstone investment in our portfolio,” said Tom Gores, Platinum’s CEO. “We have the resources and the experience to help the company pursue an aggressive agenda of growth and transformation.”
For the trailing twelve months through September 2020, Ingram Micro’s revenues were $46 billion, with a gross profit of $3.5 billion (7.6% GPM), and EBITDA of $1.0 billion (2.3% EBITDA margin). With a purchase price of $7.2 billion, this yields a TTM EBITDA purchase price multiple of approximately 7.2x.
Platinum Equity invests in a range of industries including manufacturing, distribution, transportation and logistics, equipment rental, metals services, media and entertainment, technology, and telecommunications. The firm is currently investing from Platinum Equity Capital Partners V LP, a $10 billion buyout fund, and Platinum Equity Small Cap Fund LP, a $1.5 billion buyout fund focused on the lower middle market. The firm has completed more than 300 acquisitions since its founding in 1995 and is headquartered in Beverly Hills.
“Platinum’s sector expertise, global operating capabilities and financial resources make it the ideal partner,” said Mr. Monié. “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. We will also be able to broaden our geographic reach even faster while penetrating new industries and verticals.”
Morgan Stanley and Goldman Sachs are the financial advisors to Platinum Equity on this transaction. Committed debt financing has been obtained by J.P. Morgan, Bank of America and Morgan Stanley Senior Funding. J.P. Morgan is the financial advisor to HNA Group.
This transaction is expected to close in the first half of 2021.
© 2020 Private Equity Professional | December 10, 2020