OC Business Journal

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Reports Cite Price Increase; Value Now Up to $7.4B

By Kevin Costelloe | costelloe@ocbj.com

Ingram Micro, the Irvine-based electronics distribution giant, is expected to return to U.S. hands at the end of this month after five years under HNA Technology of China.

The HNA Group was once among China’s most active conglomerates, buying up assets including the Radisson hotel chain and aviation services company Swissport Group in addition to Ingram Micro. The debt-laden group is now in court-led bankruptcy reorganization after running into financial difficulties.

Tom Gores’ Platinum Equity of Los Angeles agreed to pay $7.2 billion for the HNA unit last December.

The sale will, once again, make Ingram Micro OC’s largest privately held company by revenue, by a wide margin.

The world’s largest wholesale technology distributor said companywide net sales for fiscal year 2020, which ended Jan. 2, were $49.1 billion. That was an increase of nearly $2 billion, or 4% in U.S. dollar terms, over 2019.

Ingram Micro said early last month that the sale to Platinum Equity is expected to close “at the end of the 2021 second quarter,” which closes on June 30.

That timeline is still accurate, officials said. “Our last public update was May 4 and we have not provided any comment since that time,” Ingram Micro spokesman Damon Wright said on June 11.

Other details apparently remain in flux. Japanese business news agency Nikkei Asia said May 31 that the deal’s price tag is “now $7.4 billion, as Ingram Micro’s valuation has climbed since December.”

HNA Group paid $6 billion for Ingram in 2016; the company was reported to be back on the sales block in 2018.

Better Deal?

Nikkei said Zhu Yingfeng, vice president of HNA investor Guohua Life Insurance and an HNA Tech board director, is reportedly still hoping that a better deal emerges at the last moment.

“Given the new circumstances, in which Ingram Micro’s performance is entering a new and positive phase, the company will have to seriously consider that and try various other channels and strategies to seek a buyer that can provide a better offer price in order to further enhance the company’s profitability,” Zhu said in a statement late last month, according to Nikkei.

No other interested bidders for Ingram have been disclosed, however.

When the sale was announced in December, CEO Alain Monié predicted the company would benefit from having U.S. ownership. Platinum said Monié will continue as CEO after the sale is completed, and that the Ingram Micro headquarters will stay in Irvine.

Platinum chief Gores said Ingram Micro would be a cornerstone of Platinum’s portfolio.

250K Customers

Ingram Micro employs more than 35,000 people with operations in 60 countries, with about 900 in Orange County.

Ingram offers technology and supply chain services that are used by many of the world’s largest technology companies, such as Apple Inc., Cisco Systems Inc., Hewlett-Packard Co., IBM Corp., Microsoft Corp. and Samsung Electronics Co.

Ingram Micro boasts of more than 250,000 customers, and partners with over 2,000 vendors.

Along with other businesses across California, Ingram Micro is heading back toward normal after COVID-related shutdowns.

“We have been open for the past eight weeks, but we are in limited capacity with just 25% of our associates coming in followed by three weeks working from home as we rotate through,” spokesman Damon Wright told the Business Journal on June 11.

In addition to various health checks, the company does not allow face-to-face meetings; all conference rooms are closed and visitors are barred from the facilities, Wright said. ■

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