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​Was Ingram Micro on the verge of a multi-billion dollar distribution merger?

​Was Ingram Micro on the verge of a multi-billion dollar distribution merger?

Distribution giant openly explored merging with distribution rivals, entering into discussions ​months before being acquired for $US6 billion by Chinese company, Tianjin Tianhai.​

Alain Monié - CEO, Ingram Micro

Alain Monié - CEO, Ingram Micro

Ingram Micro openly explored merging with distribution rivals, entering into discussions months before being acquired for $US6 billion by Chinese company, Tianjin Tianhai.

Findings from the company’s U.S. Security and Exchange Commission (SEC) file, released this week, show that in January 2015, the distribution giant “entered into discussions” to acquire a large technology distributor and competitor, in what the business contemplated would have been a cash and stock merger.

Ultimately, the unnamed company determined that the antitrust risk was too significant and discontinued discussions, with speculation growing as to the identity of the party.

With the facts unclear at this stage, the competitive concerns outlined in the filing suggest that a high-end distributor was the target, with Synnex and Tech Data already touted in channel press as prospective acquisition parties.

But following discussions and a written indicative proposal, the unnamed distributor pulled out of the deal in January 2016, a month before Tianjin Tianhai made its move.

“To maximise value for its stockholders, Ingram Micro regularly and in the ordinary course of its business evaluates strategic alternatives, including opportunities for potential strategic transactions,” the filing stated.

“In connection with its evaluation of potential strategic transactions, Ingram Micro has met from time to time with other companies in its sector or adjacent sectors, as well as financial sponsors, to evaluate potentially complementary acquisitions and other strategic investments and alternatives.

“As part of this process, Ingram Micro has identified and completed a number of acquisitions of companies in the United States and internationally to further its strategic objectives and support key business initiatives, most recently with a focus on expanding its supply chain solutions with a full suite of lifecycle services for IT and mobility products, adding enterprise computing value-add capabilities, enhancing its cloud computing value proposition, and expanding geographically.”

As outlined during the filing, Ingram Micro also explores, “from time to time” at the direction of its Board, larger and more transformative mergers and acquisition transactions when opportunities arise.

However, due to significant concentration of a small number of large IT distributors in the United States and internationally, the company acknowledges that opportunities for strategic acquisitions or other transactions with competitors have been limited.

Locally speaking, Ingram Micro acquired Connector Systems, a value-added IT solutions provider based out of New Zealand, in February 2016, recruiting 45 new vendors in the process.

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