Ingram Micro Broadens Geographic Reach Into High-Growth Middle East and North Africa Markets Acquisition Expands Value-Added Technology Distribution and Services Capabilities
SANTA ANA, Calif., Aug. 13, 2012 /PRNewswire/ -- Ingram Micro Inc. (NYSE: IM), the world's largest technology distributor and supply-chain services provider, today announced it is broadening its geographic reach into the Middle East and North Africa with the signing of a definitive agreement to acquire certain IT businesses of Dubai-based Aptec Holdings Ltd. Aptec is a leading value-added distributor in the Middle East, Turkey and North Africa, with products and solutions covering data center, storage, security, networking, and software categories, including technical services.
The acquisition is expected to contribute more than $250 million in revenue to Ingram Micro on an annual basis and is expected to close before the end of the third quarter of 2012, subject to the satisfaction of certain closing conditions. Dr. Ali Baghdadi, founder and chief executive officer of Aptec, will lead the acquired operations reporting to Shailendra Gupta, senior executive vice president and president, Ingram Micro Asia-Pacific. Further details of the transaction were not disclosed.
"The acquisition of Aptec fits well with our strategic objectives to continue to build our higher margin specialty businesses while broadening our geographic reach to capitalize on higher growth markets," said Alain Monié, president and chief executive officer of Ingram Micro Inc. "The Middle East and Africa are robust and growing markets with total IT spending projected to reach $80 billion by 20151. Aptec has been highly effective in growing their business and enhancing profitability in these emerging markets and we believe this combination will further accelerate these ongoing objectives. Aptec has a long-tenured, accomplished leadership team and we look forward to joining forces with them."
Founded in 1980, Aptec currently operates in 6 countries and provides products and services to key Middle East and North Africa countries including the United Arab Emirates, Kuwait, Oman, Egypt, Lebanon, Pakistan and Turkey. The company's regional geographical coverage and extensive customer base are staffed by approximately 350 associates serving over 3,800 active resellers. Aptec's marketing programs, advanced logistics services, technical support, consultancy, high-level technical consulting and outsourcing services, financial services and product delivery and distribution capabilities have made the company one of the most prominent value-added distributors in the region.
"We are excited to join with Ingram Micro," said Baghdadi. "For more than 30 years Aptec has focused on building the company through innovation, value-added service and an unwavering commitment to our customers and vendor partners. The combined strength of Aptec in the Middle East and North Africa and the global leadership and strategic vendor and customer relationships of Ingram Micro provide an excellent opportunity for expanded reach into new services, products and geographies and we expect the union to offer even more value to our combined community."
1Source: IDC Blackbook, Q2 2012.
Cautionary Statement for the Purpose of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995
The matters in this press release that are forward-looking statements are based on current management expectations. Certain risks may cause such expectations to not be achieved and, in turn, may have a material adverse effect on Ingram Micro's business, financial condition and results of operations. Ingram Micro disclaims any duty to update any forward-looking statements. Important risk factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, without limitation: (1) we are dependent on a variety of information systems, which, if not properly functioning, or unavailable, could adversely disrupt our business and harm our reputation and earnings; (2) changes in macro-economic conditions may negatively impact a number of risk factors which, individually or in the aggregate, could adversely affect our results of operations, financial condition and cash flows; (3) we continually experience intense competition across all markets for our products and services; (4) we operate a global business that exposes us to risks associated with conducting business in multiple jurisdictions; (5) our failure to adequately adapt to IT industry changes could negatively impact our future operating results; (6) terminations of a supply or services agreement or a significant change in supplier terms or conditions of sale could negatively affect our operating margins, revenue or the level of capital required to fund our operations; (7) we have made and expect to continue to make investments in new business strategies and initiatives, including acquisitions, which could disrupt our business and have an adverse effect on our operating results; (8) substantial defaults by our customers or the loss of significant customers could have a negative impact on our business, results of operations, financial condition or liquidity; (9) changes in, or interpretations of, tax rules and regulations, changes in mix of our business amongst different tax jurisdictions, and deterioration of the performance of our business may adversely affect our effective income tax rates or operating margins and we may be required to pay additional taxes and/or tax assessments, as well as record valuation allowances relating to our deferred tax assets; (10) changes in our credit rating or other market factors such as adverse capital and credit market conditions or reductions in cash flow from operations may affect our ability to meet liquidity needs, reduce access to capital, and/or increase our costs of borrowing; (11) failure to retain and recruit key personnel would harm our ability to meet key objectives; (12) we cannot predict with certainty what loss we might incur as a result of litigation matters and contingencies that we may be involved with from time to time; (13) we may incur material litigation, regulatory or operational costs or expenses, and may be frustrated in our marketing efforts, as a result of new environmental regulations or private intellectual property enforcement disputes; (14) we face a variety of risks in our reliance on third-party service companies, including shipping companies for the delivery of our products and outsourcing arrangements; (15) changes in accounting rules could adversely affect our future operating results; and (16) our quarterly results have fluctuated significantly. We also face a variety of risks associated with our recently announced signing of definitive agreements to acquire Aptec and BrightPoint Inc., including: our ability to timely complete the transactions, if at all; our ability to complete the transactions considering the various closing conditions, including those conditions related to regulatory approvals and BrightPoint shareholder approval; the financial performance of Aptec, BrightPoint and Ingram Micro through the completion of the respective transactions; each of Aptec and BrightPoint's businesses may not perform as expected due to transaction-related uncertainties or other factors; the ability of each of Aptec, BrightPoint and Ingram Micro to retain relationships with customers, vendors and carriers; management's ability to execute its plans, strategies and objectives for future operations, including the execution of integration plans; growth of the mobility industry; uncertainties relating to litigation, including pending and future BrightPoint shareholder lawsuits related to the proposed or completed transaction; and other unknown, underestimated and/or undisclosed commitments or liabilities; our ability to maintain access to adequate levels of capital at reasonable rates ; and our ability to achieve the expected benefits and manage the expected costs of the transactions.
Ingram Micro has instituted in the past and continues to institute changes to its strategies, operations and processes to address these risk factors and to mitigate their impact on Ingram Micro's results of operations and financial condition. However, no assurances can be given that Ingram Micro will be successful in these efforts. For a further discussion of significant factors to consider in connection with forward-looking statements concerning Ingram Micro, reference is made to Item 1A Risk Factors of Ingram Micro's Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2011 and Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2012; other risks or uncertainties may be detailed from time to time in Ingram Micro's future SEC filings.
About Ingram Micro Inc.
As a vital link in the technology value chain, Ingram Micro creates sales and profitability opportunities for vendors and resellers through unique marketing programs, outsourced logistics, technical and financial support, managed and cloud-based services, and product aggregation and distribution. The company is the only global broad-based IT distributor, serving 145 countries on six continents with the world's most comprehensive portfolio of IT products and services. Visit www.ingrammicro.com.
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