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Chinese firm snaps up digital signage distributor Ingram Micro for $6B

Ingram Micro Inc. and Tianjin Tianhai Investment Company Ltd. announced that they have entered into a definitive merger agreement under which Tianjin Tianhai will acquire Ingram Micro in an all-cash transaction with an equity value of approximately $6 billion.

February 18, 2016

Ingram Micro Inc. and Tianjin Tianhai Investment Company Ltd. announced that they have entered into a definitive merger agreement under which Tianjin Tianhai will acquire Ingram Micro in an all-cash transaction with an equity value of approximately $6 billion.

Upon close of the merger, Ingram Micro will become a part of HNA Group, a Hainan-based Fortune Global 500 enterprise group and a leader in aviation, tourism and logistics, and the largest stockholder of Tianjin Tianhai. The offer of $38.90 per share, which has been unanimously approved by both both companies' boards of directors, represents a premium of approximately 39 percent over the average closing share price of Ingram Micro for the 30 trading days ended Feb. 16, 2016.

Following the close of the transaction, which is expected in the second half of 2016, Ingram Micro will operate as a subsidiary of Tianjin Tianhai, consolidated under HNA Group, the largest stockholder of Tianjin Tianhai (via HNA Group's subsidiaries). Ingram Micro is expected to remain headquartered in Irvine, California, and Ingram Micro's executive management team will remain in place, with Alain Monié continuing as CEO. All Ingram Micro lines of business and all regional and country operations are expected to continue unaffected.

Adam Tan, vice chairman of the board of directors and CEO of HNA Group, said, "Ingram Micro has clearly established itself as a leading distributor and global provider of IT products and services. The company has a proven and talented team, and we believe Ingram Micro is unrivaled in its ability to offer industry-leading, differentiated and easy-to-manage solutions to vendor and customer partners worldwide. We look forward to supporting Ingram Micro's management team and strategies, including continued expansion into new geographies, while also offering their vendor and customer partners access to new and complementary offerings. We share Ingram Micro's commitment to integrity, innovation and performance, and we are confident this transaction will enable Ingram Micro to continue to distinguish itself in the marketplace and meet the needs of its vendor and customer partners better than ever before."

Once the transaction is finalized, Tan said, Ingram Micro will become the largest member enterprise of HNA Group in terms of revenue, and should help facilitate the "internationalization process" of the group."With the help of Ingram Micro, HNA Group would have access to business opportunities in emerging markets, which have higher growth rates and better profitability," he said. "Furthermore, the addition of Ingram Micro would help the logistics sector of HNA Group transform from a logistics operator to a supply chain operator, and provide one-stop services while improving efficiencies."

Ingram Micro CEO Alain Monié said, "Our agreement to join HNA Group delivers near-term and compelling cash value to our stockholders and we expect it to provide exciting new opportunities for our vendors, customers and associates. Innovation, new services introduction, brand management and ensuring the stability and continuity of the businesses joining their enterprise are fundamental to HNA Group's overall strategy. As a part of HNA Group, we will have the ability to accelerate strategic investment, as we continue to capitalize on the constant evolution of technology and emerging trends by adding expertise, capabilities and geographic reach. Additionally, Ingram Micro will now be part of a larger organization that has complementary logistics capabilities and a strong presence in China that can further support the growth and profitability objectives of our vendor and customer partners."

In conjunction with this announcement, Ingram Micro is suspending its quarterly dividend payment and its share repurchase program prior to the closing of the transaction.

According to investing website Motley Fool, shares of Ingram Micro stock soared on Thursday after the company announced that it had agreed to be acquired by the Chinese firm. At 11:30 a.m. EST Thursday, the stock was up about 21 percent, the site said.