Ingram Micro Fortifies Consumer Electronics Presence with Acquisition of DBL Distributing
World's Largest Technology Distributor Expands its Consumer Electronics Portfolio by Purchasing a Leading U.S. Provider of Accessories
SANTA ANA, Calif., June 13 / -- Ingram Micro Inc. (NYSE:IM), the world's largest technology distributor, strengthened its position in the consumer electronics market today with the signing of a definitive agreement to acquire certain net assets of DBL Distributing Inc., one of the nation's top distributors of consumer electronics (CE) accessories and related products.
"Our acquisition of DBL Distributing is another step forward in Ingram Micro's consumer electronics strategy," said Greg Spierkel, chief executive officer, Ingram Micro Inc. "This strategy positions Ingram Micro at the forefront of two significant trends: the continuing convergence of commercial and consumer technologies and the growing importance of retailers in the marketplace. The transaction is an example of how we plan to deploy capital in the future -- through strategic acquisitions that spur growth, enhance profitability and expand our addressable market."
DBL Distributing, based in Scottsdale, Ariz. with approximately 350 employees, offers a comprehensive mix of more than 17,000 consumer electronics products to thousands of independent retailers across the United States. The company reported 2006 sales of nearly $300 million, following four years of double-digit sales growth, with gross and operating margins double those of Ingram Micro's core distribution business.
"While our purchase of AVAD two years ago made us leaders in the custom installation market, the acquisition of DBL makes us leaders in the independent retail market," said Keith Bradley, president, Ingram Micro North America. "This acquisition provides us with a complementary portfolio of products and services for a new and expansive customer base. We plan to leverage this opportunity by cross-selling our current selection of information technology products to DBL's customers as well as offer our customers access to DBL's extensive CE accessory products."
Bradley added that DBL Distributing will operate as a wholly owned subsidiary of Ingram Micro Inc., maintaining the same brand name, business model and management structure to ease the transition for customers and vendor partners of both companies.
"DBL Distributing is excited to be a part of Ingram Micro and at the prospect of being able to offer a wider range of information technology products to our customer base," said David Lorsch, president and CEO of DBL Distributing. "Our world-class management team led the company to 18 straight years of impressive annual growth, and we're looking forward to joining with Ingram Micro to provide the necessary resources and capital to help us continue this legacy."
The agreement calls for a purchase price of $96 million, subject to final working capital adjustments, and will be financed through existing borrowing capacity. The transaction is expected to be nominally accretive to earnings per share in 2007, building to approximately $0.03 and $0.06 in 2008 and 2009, respectively, which assumes annual non-cash amortization expense for intangibles of approximately $3.0 million and a combined U.S. federal and state income tax rate of 40 percent.
DBL Distributing publishes the most comprehensive CE wholesale catalog in the industry, highlighting a vendor base that includes renowned CE brands such as Philips, Samsung and Sony. As part of this transaction, Ingram Micro has also purchased NXG Technology, DBL's own exclusive brand of custom audio and video installation products. The NXG brand includes two complete lines of audio/video cables, three complete lines of in-wall and indoor/outdoor speakers and a complete offering of in-wall volume controls and A/V selectors.
Ingram Micro has instituted in the past and continues to institute changes to its strategies, operations and processes to address these risk factors and to mitigate their impact on Ingram Micro's results of operations and financial condition. However, no assurances can be given 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 Item 1A Risk Factors of Ingram Micro's Annual Report on Form 10-K for the year ended December 30, 2006; other risks or uncertainties may be detailed from time to time in Ingram Micro's future SEC filings. Ingram Micro disclaims any duty to update any forward-looking statements.
About Ingram Micro Inc.
As a vital link in the technology value chain, Ingram Micro creates sales and profitability opportunities for vendors and resellers through unique marketing programs, outsourced logistics services, technical support, financial services, and product aggregation and distribution. The company serves more than 150 countries and is the only global broadline IT distributor with operations in Asia. Visit http://www.ingrammicro.com/.
About DBL Distributing Inc.
DBL Distributing, Inc. is one of the nation's top distributors of consumer electronics accessories and related products, with more than 30,000 retail customers nationwide. Headquartered in a custom-built 144,000 square foot facility in Scottsdale, Arizona, DBL carries more than 17,000 products from nearly 400 quality manufacturers. DBL offers same-day shipping for orders placed by 5:00 p.m. MST, a best price for 1 or 100 piece policy and has a "no minimum" order policy. DBL's business strategy proves that customers come first. For more information please visit www.dbldistributing.com/, or call (800) 733-6766.
Source: Ingram Micro Inc.
CONTACT:Media, Jim Trainor, +1-714-382-2378, jim.trainor@ingrammicro.com, or Rekha Parthasarathy, +1-714-382-1319, rekha@ingrammicro.com, or Investors, Ria Marie Carlson, +1-714-382-4400, ria.carlson@ingrammicro.com, or Kay Leyba, +1-714-382-4175, kay.leyba@ingrammicro.com, all of Ingram Micro Inc.
Web site: http://www.ingrammicro.com/
http://www.dbldistributing.com/
