YOU ARE HERE: LAT HomeCollections

Ingram Micro, Big Japanese Firm Sign Distribution Deal

October 13, 1998|From Bloomberg News

Softbank Corp., Japan's largest distributor of computer software, said it signed an agreement with Ingram Micro Inc. to cooperate in the distribution of computer-related products and services.

As part of the agreement, Softbank and Santa Ana-based Ingram will by year-end buy $50 million in shares in each other, Softbank founder and President Masayoshi Son said at a news conference in Tokyo.

While the precise ratios would be affected by currency and share price fluctuations, at today's valuations the arrangement would mean the two companies hold "about 1%" of each other's shares, Son said.

Under the agreement, Softbank and Ingram will complement each other's sales and distribution networks worldwide. Ingram will become Tokyo-based Softbank's exclusive partner in markets outside Japan where Ingram already has operations, and Softbank will offer Ingram a sales service in Japan.

The companies hope the partnership will help their international businesses become more efficient and boost their "channel assembly" capabilities, in which parts supplied by a range of manufacturers are made into one product. Their combined sales target for PC-related products for the first 12 months is $30 billion, double what they say they could achieve independently.

"Future business growth depends on who has the information, and we think we'll be second to none in that field," said Jerre L. Stead, Ingram chairman and chief executive officer.

With annual growth in the information technology industry projected at 60%, mutual access to wider markets should allow both companies to accelerate their growth, Stead said.

Ingram Micro's stock closed Monday at $41.88, up 88 cents a share.

Los Angeles Times Articles