Brightpoint Inc. will acquire Danish cellphone distributor Dangaard Telekom in a deal valued at $300 million, making Brightpoint the largest distributor of handsets serving European and U.S. markets. The transaction is expected to be completed in June or July, according to the companies, and depends on shareholder and regulatory approvals.
Brightpoint will assume $300 million in debt and issue 30 million shares to a holding company controlled by private equity firm Nordic Capital Fund VI, which will own 37 percent of Brightpoint and nominate three members of the latter’s nine-member board.
Together, Brightpoint and Dangaard distributed in excess of 64 million handsets last year, a little over 6 percent of the one billion handsets shipped worldwide. The two companies’ 2006 revenues are estimated at $4.6 billion and combined operating income for last year would have been $106 million. Together, the companies will have 3,100 employees in 25 countries.
If the deal goes through, the combined companies’ corporate headquarters will continue to be Brightpoint’s offices in Plainfield, Ind., while Padborg, Denmark, will serve as the company’s European headquarters.
“We see today’s acquisition . as creating a global powerhouse with unprecedented scale and scope in its market segment,” wrote CIBC World Markets analyst Ittai Kidron in a note to investors. CIBC upgraded its opinion of the company from “sector perform” to “sector outperform” on the news.
Immediate benefits will include improved pricing and flexibility from increased scale, greater global footprint and “core partner” relations with handset vendors and stronger ties to network operators, Kidron wrote.
The analyst wrote that the deal should add to Brightpoint’s revenue by the second full quarter after the deal closes, even without annual cost synergies estimated at $8 million to $10 million.
Brightpoint’s stock was up more than 10 percent on the news to around $11.56 per share.
Brightpoint buys up Danish firm for $300M
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