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Ingram Micro in Deal to Buy Tech Pacific

September 28, 2004|From Bloomberg News

Ingram Micro Inc., the world's largest computer products distributor, said Monday that it had agreed to acquire Sydney, Australia-based Tech Pacific Holdings Ltd. for $493 million.

The purchase would nearly double Santa Ana-based Ingram Micro's revenue in the Asia Pacific region and should boost its 2005 earnings, excluding integration costs, according to a statement released by the company.

Ingram Micro is buying Tech Pacific from Hagemeyer and CVC Asia Pacific, an investment group.

Ingram Micro has been seeking a partner to help expand in the Asia Pacific region after sales there made up only 10% of its business last year. The U.S. generates almost two-thirds of the company's revenue. The company in July said second-quarter income had more than doubled as sales rose 11% to $5.72 billion.

"Tech Pacific is a strong, profitable player in some of the region's key markets," said Ingram Micro Chief Executive Kent Foster. "Sales have outperformed the overall market, and every country-based business unit generated an operating profit last year."

Tech Pacific had $2.2 billion in revenue last year and an operating margin of about 2% of revenue for fiscal 2003, Ingram Micro said. Tech Pacific employs 1,800 people in countries including Australia, New Zealand, Hong Kong, Malaysia, Singapore and Thailand.

The transaction will be completed by the end of this year, Ingram Micro said.

Hagemeyer, based in Naarden, the Netherlands, said it would see a gain of about $73.5 million from the sale of its 31.5% stake in Tech Pacific. Hagemeyer had kept its minority stake in Tech Pacific after selling the remainder to funds advised by CVC Asia Pacific in June of last year.

The company had spoken to investors about a potential listing on the Australian Stock Exchange, Tech Pacific Chief Executive Shailendra Gupta said this month.

"We finally agreed to a trade sale over the weekend," Andrew Cummins, managing director of CVC Asia Pacific, said Monday.

"We also pulled the initial public offering on the weekend. The trade sale provides a certainty" compared with a bidding process for stock by investors in an IPO, he said.

Tech Pacific distributes modems, monitors, mobile phones and digital cameras made by other companies.

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