IRVINE, Calif., Oct. 20, 2015 /PRNewswire/ -- Ingram Micro Inc. (NYSE: IM) today announced that it has entered into a definitive agreement under which, subject to closing conditions, Ingram Micro will acquire Sao Paulo, Brazil-based Grupo AÇÃO (AÇÃO), one of Latin America's leading providers of critical value-add IT solutions. In addition to a portfolio of higher value products, including those from strategic vendors such as IBM, Oracle, Red Hat, EMC and VMware, AÇÃO also provides integration services, sales support and financial services, with operations in Brazil, Colombia, Argentina, Chile, Peru, Uruguay and Ecuador. AÇÃO key leadership has agreed to join Ingram Micro upon close of the transaction to assist in the integration and help drive continued growth and expanding profitability across the combined business thereafter. The transaction, which is subject to customary regulatory and other closing conditions, is expected to close late in the 2015 fourth quarter. AÇÃO is expected to contribute in excess of $300 million in annual value-add solutions revenue to Ingram Micro and be modestly accretive to 2016 full year non-GAAP earnings per share.
Ingram Micro CEO Alain Monié commented, "As evidenced by a history of strong operating margin contribution, Ingram Micro has been extremely successful in rapidly expanding our high value business in Latin America, particularly in Brazil, where we are already established as one of the leading overall technology distributors and have enjoyed strong double digit growth rates in local currency for many quarters. AÇÃO's position as a key solutions value-added distributor is a perfect complement to our rapidly growing higher margin business in the region. The company has a long history of strong business fundamentals, and brings experienced management in an emerging geography that remains attractive for Ingram Micro over the long-term. We expect to realize meaningful vendor cross-selling opportunities in the countries we share, as together we will have a significantly expanded portfolio of high value offerings to better serve our customers. We look forward to AÇÃO joining Ingram Micro and we are confident the addition will enable us to build further on the region's revenue and profitability contribution."
Enio Issa, Grupo AÇÃO president, added, "Ingram Micro is the perfect partner for AÇÃO to help us continue to drive our established and fast growing high value business in Latin America and I am confident that together we can further accelerate the strong performance our individual companies have provided for our customers. Ingram Micro understands how to successfully conduct business in the region and we are excited to join such a globally recognized world class organization."
About Ingram Micro Inc.
Ingram Micro helps businesses realize the promise of technology. It delivers a full spectrum of global technology and supply chain services to businesses around the world. Deep expertise in technology solutions, mobility, cloud, and supply chain solutions enables its business partners to operate efficiently and successfully in the markets they serve. More at www.ingrammicro.com.
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 within the meaning of the Private Securities Litigation Reform Act, including statements relating to the expected benefits from the combination, additional revenues, and accretion to earnings, 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) changes in macro-economic and geopolitical conditions can affect our business and results of operations; (2) our acquisition and investment strategies may not produce the expected benefits, which may adversely affect results of operations; (3) we are dependent on a variety of information systems, which, if not properly functioning, and available, or if we experience system security breaches, data protection breaches or other cyber-attacks, could adversely disrupt our business and harm our reputation and net sales; (4) the validity, subsistence and enforceability of the patent portfolio that we currently hold or acquire may be challenged, and we have a risk of being involved in intellectual property disputes that could cause us to incur substantial costs, divert the efforts of management or require us to pay substantial damages or licensing fees;(5) failure to retain and recruit key personnel would harm our ability to meet key objectives; (6) we operate a global business that exposes us to risks associated with conducting business in multiple jurisdictions; (7) our failure to adequately adapt to industry changes could negatively impact our future operating results; (8) we continually experience intense competition across all markets for our products and services; (9) termination of a key 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; (10) substantial defaults by our customers or the loss of significant customers could negatively impact our business, results of operations, financial condition or liquidity; (11) changes in, or interpretations of, tax rules and regulations, changes in the 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; (12) our goodwill and identifiable intangible assets could become impaired, which could reduce the value of our assets and reduce our net income in the year in which the write-off occurs; (13) 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; (14) we cannot predict the outcome of litigation matters and other contingencies that we may be involved with from time to time; (15) Our failure to comply with the requirements of environmental regulations could adversely affect our business; (16) 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; (18) changes in accounting rules could adversely affect our future operating results; and (19) our quarterly results have fluctuated significantly and (20) the AÇÃO transaction may not be consummated for several reasons, including failure to receive approval by competent Competition authorities; AÇÃO vendors may choose to terminate their existing agreements once AÇÃO has been purchased by us, causing us not to realize the anticipated business synergies or earning accretion. Additionally, we risk failing to realize the anticipated benefits of an acquisition due to, among other things, the unsuccessful integration of the acquired business. We face a variety of risks associated with our ability to integrate AÇÃO into our existing systems and organization including: management's ability to execute its plans, strategies and objectives for future operations, including the execution of integration plans; customer demand in these regions; currency fluctuation; the potential for political unrest; potential regulatory constraints; and our ability to achieve the expected benefits and manage the costs of the transaction. Further, despite its global presence, Ingram Micro may fail to proactively identify and tap into emerging markets and geographies. We have historically instituted, and will continue to institute, changes to our strategies, operations and processes in an effort to address and mitigate risks; however, there are no assurances 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 our SEC filings, and specifically to Item 1A-Risk Factors, of our latest Annual Report on Form 10K.
SOURCE Ingram Micro Inc.