Chinese Company HNA Buys Ingram Micro For $6 Billion ALL Cash

By: John Honovich, Published on Feb 17, 2016

We take it back; All the things about Ingram Micro being a bunch of fools. They have totally redeemed themselves.

Faced with an increasingly damaged domestic economy, Chinese companies are loading up on debt and buying Western businesses in a wild gambit for growth.

Cashing Out

Ingram is literally cashing out on this (see their announcement and deal presentation). Not only is the Chinese company paying them $6 billion, it is nearly 40% more than their recent stock price. And Ingram's board and shareholders will have no risk of holding volatile Chinese shares, as the Chinese company is paying them all cash.

The Chinese company is paying $38.90 per share, which is far higher than Ingram's stock price since 1999 [link no longer available] during the dot.com bubble. Quite a deal if you can get it.

Chinese Buyer - Aviation

An airline company, HNA, based in Hainan, China's most southern province, is the buyer. HNA boasts [link no longer available]:

** **** ** ****; All *** ****** ***** Ingram ********** * ******* *****. **** **** ******* redeemed **********.

***** **** ** ************ damaged domestic *******,******* ********* *** ******* up ** ******* ****** ******* ********** in * **** ****** for ******.

Cashing ***

****** ** ********* ******* out ** **** (*** ***** ************ ******* ************). *** **** ** the ******* ******* ****** them $* *******, ** is ****** **% **** than ***** ****** ***** price. *** ******'* ***** and ************ **** **** no **** ** ******* volatile ******* ******, ** the ******* ******* ** paying **** *** ****.

*** ******* ******* ** paying $**.** *** *****, which ** *** ****** than ******'* ***** ***** since **** [**** ** longer *********] ****** *** dot.com bubble. ***** * **** ** you *** *** **.

Chinese ***** - ********

** ******* *******, ***, ***** in ******, *****'* **** southern ********, ** *** buyer. *** ****** [**** no ****** *********]:

[***************]

"*** ***** *** * fleet ** **** *** aircrafts, ***** ****** *** domestic *** ************* ******, fly ** **** *** cities, *** **** ****** 77.4 ******* ********** ********."

**** ** ***'* *** overview *****, ******* *** little ********** ***'* ******** has ** ******:

**** **** ** ******** company **** ** ** with ** ** ***********? HNA *** * **********, ******* Tianhai, that **** *** ****** to ********* **** ******** to ******* *********, ** they ********:

"******* ******* *** *** developed **** * *********** marine ******** ******* **** a ****** ******** ******** investor *** ********, ******** on ********** ** ******** market ********, ****** ***** investment *** ********** ***** on ******** *** ********** of *** ******** ********, as **** ** ********* service *** *** ******** industry."

** ******* ****** ***** will ****** **** ** that ****** / ******** organization, ******* *****'* **** little '*********' ** **** clear ************ ******* **** Ingram ***** **** *** its *** ****** *******.

*** *** ****** * number ** ************* ********* over *** **** *** years, **** ******** * Brazilian *******:

Government Funding *****

**************** ******* ********** ******* will ** **** ** acquire ******:

"******* *******/*** ***** **** fund *** ****** ***** its *** ***** ** well ********** **** *********. ******* *******/*** ***** *** good ******* ************* **** a ****** ********* ***** *** ********* institutions."

***, *******, ***** *** *** by *** **********. ** ******, ***** the ******* ** ** airline, ** *** *** substantial ********** *********.

Bubble ****

********* *** ************** ** that ******* ********* **** become ** ******** **** they *** ***** ** use ***** ***** ** takeover *** *****. ** doubt ****.

*** ************ ******* *******, the ***** **** ** their ***** ******, ********* ******** ** ******* flight **** *****, ***** ** *** devaluation, *** ******* **********'******** ******* ****** / ****, *** * **** dangerous ***********.

"Weird ******* *****"

****** **** ************* ***** *** simply ****** ******'* ***** release, *** ******* **** does **** ** ********** take ** *** ****: "***’* $* *** ****** bid *** ***** ******* logic." **** ** **** was ******:

  • "** ****** * ***** ******* a ********* ****." ** Chinese ******** ***** ******* against *** ** ******* (which **** **** *** the *** ****** **** not ******), *** ** dollars **** ****** ***** generates ***** ** ***** more ** ***.
  • "************ **** **** *** slowing ******* ** *** People’s ******** ** ******* driver." ** *** ***** hand, ** ** *** as ** ****** ***** has **** ********** ******* growth ******.
  • "*** **** ** ***** political *******. ** *** Hainan-based ***** *** ****** one ** *** ******** bearers *** *****’* ***** into ******** ******* ** will ***** ****** **** Chinese ***********, ***** ** turn **** **** ** access ** **** ***** credit." ******, *** ******* government ** **** **** in ***** ** ******** soft ***** *** ******** pride ** *** ******* by ****** ***** **********. Whether ****** ***** ****, remains ** ** ****.

Too **** ** **** **

***** *** ****'* **** of ***** *********, *** did ****** ** **? Ingram *** ***** ****** *** ******:

"*** ***** ********** **** the ***** ******* ** Ingram ***** ************ ******** near-term, ************ ***** ** our ************ ** * substantial *******"

** ***** *****, *** money ******* *** *** good ** **** **.

*** ***, ****** * mature, *** ******, ********** low ****** ******** **** Ingram ** * ******* premium ** *** ***** business.

*** **** **** ****** care? *** **** ** a **** *** *** them.

Comments (26)

Tonight's Powerball winner is...

Joe, lol...

Anyone who wants to sell out now should start reaching out to Chinese companies!

This is the single greatest piece of news I have ever read on IPVM!

And I was this close to dumping this dog for a 2015 loss!

Thank you, again!

"And I was this close to dumping this dog for a 2015 loss!"

Don't take this as stock trading advice but...

The agreed acquisition price is $38.90. The stock today, after yesterday's announcement, jumped but is still ~$36. My read is that the $3 gap is from investors having some concern that the deal will go through. Of course, there are risks given Ingram's size and the China / US politics involved.

So if you do own Ingram, you might be prudent to count your gains today rather than risk for the last $3 per share.

...concern that the deal will go through. Of course, there are risks given Ingram's size and the China / US politics involved.

Agreed. Fingers crossed.

Related: Light bulbs > Security Cameras

have ?
What will happen if Chinese company want to buy IPVM
John?

No, I am quite happy with what we do and what we make at IPVM. Not interested.

Even if they promised to put in an authentic Chinese Wall? ;)

That's exactly what Dave McDonald said.

Arecont?

Arecont would sell to anyone who would meet Kaplinsky's unrealistic expectations but I am not sure what the Chinese would want with a camera manufacturer with a horrible brand.

Woah to anyone wild enough to buy Arecont.

Woo to anyone wild enough to buy Arecont.
Woah to anyone wild enough to buy Arecont.

Woe works as well...;)

Strange days as China Inc flexes its muscles

Ingram is a $30B supply chain company with a big international footprint. HNA 2015 revenues were $29B. I don't think the type of products that Ingram sells is important to HNA. It's probably the scalable logistics and technology. Maybe it makes more sense than it appears on the surface. Will be interesting to see what they acquire next.

Actually, Ingram does ~$45 billion in annual revenue. One thing it will do for HNA is wonders for their Fortune 500 ranking, which they care greatly about.

I'd still love to hear how any aviation company is going to make a return by paying a 40% premium on an IT distributor. Anyone with theories, please share!

China is releasing the balance of trade dollars they are holding to the only safe place for them --USA.

Two things occur to me:

1. the greater the investment in hard assets in the US, the harder it is to be confrontational in the world. Competitive yes, confrontational no.

2. I wonder how the US government views this acquisition with regard to the BAA & TAA purchasing rules for buying American. Will they remove Ingram Micro from their approved supplier list? What about Defense Contractors Boeing, Northrup, GE, Dell, HP etc.

Patrick,

#2 is a good question. I assume Ingram will argue that since they do not actually develop any of the products they sell, but simply move them around that it should not impact them.

But I do not know. Just last month the US government blocked the Philips lighting component to China deal, so perhaps they will find a reason or concern to either block or restrict Ingram.

1. the greater the investment in hard assets in the US, the harder it is to be confrontational in the world. Competitive yes, confrontational no.

+1

6B USD looks to be a lot of memory for any individual investor, but not for China banks. The lesson they will learn by this acquisition of Ingram Micro can be more useful than buying a MOTO cellphone company.

As China economy is bigger and more international than before, logistics is becoming more strategically important. Recently, two China big shipping companies have been approved to merge into a super big one.

The merged revenue is more than 40B.

So the airline company may want to convert herself into a more generic logistic/shipping company, and be more international. This can be good or bad, depending on your standpoint.

$$ Cha-Ching-ram $$

When I think about it, its a bit disconcerting to think the products we purchase come from/are owned by the Chinese particularly with how invasive the products can be. For instance, Vizio TV's... anyone else feeling odd about it?

Our business with "D and H", US based, and employee owned is guaranteed to grow.

Why is there the Soviet Union flag with hammer and sickle on it, when the article is dealing with Chinese companies?
https://en.wikipedia.org/wiki/Flag_of_the_Soviet_Union

The flag of the PRC has only stars on it, no hammer and sickle: https://en.wikipedia.org/wiki/Flag_of_China

Another HNA acquisition, HNA "has agreed to buy Swiss airline catering firm Gategroup Holdings for $1.5 billion in cash"

Update: WSJ is reporting today that HNA is in talks to sell off Ingram Micro, just 2 and a half years later: WSJ - HNA, Under Pressure From Beijing, to Sell Its Overseas Empire

HNA has been a disaster over the last few years, with mounting losses, huge debt, their Chairman dying while taking a photograph in France, etc...

Could be a good move for Ingram and someone will get to buy them a steep discount to the $6 billion cash HNA paid.

Billion is what you meant, although if it sells for less than 6 million I might try to buy it. LOL Now it says billion.

Login to read this IPVM report.
Why do I need to log in?
IPVM conducts unique testing and research funded by member's payments enabling us to offer the most independent, accurate and in-depth information.

Related Reports

Dahua CEO Is Out on Feb 28, 2020
Dahua CEO Li Ke has resigned less than 3 years after he was brought in from Huawei to professionalize management. Inside this note, we examine...
"Hikvision Football Arena" Lithuania Causes Controversy on Jan 24, 2020
Controversy has arisen in Lithuania over Hikvision becoming a soccer team's top sponsor and gaining naming rights to their arena, with one local MP...
Senator Vitter Becomes "Proud Member Of The Hikvision Team", Calls Out "Anti-China" Rubio on Oct 29, 2019
Senator turned China lobbyist David Vitter has become a self-proclaimed 'proud member of the Hikvision team', a China (PRC) government-owned...
Hikvision Dissolves North American Business Unit, Splits Canada and USA on Oct 15, 2019
Hikvision has dissolved its North American Business Unit, splitting up US and Canada operations as the PRC-government owned manufacturer faces...
Megvii Financials and Growth Examined on Aug 30, 2019
Megvii has already received more than a billion dollars in investment. Now, the company, a top China facial recognition provider, has filed for an...
Stanley Makes "Multi-Million Dollar Investment" Into Banned Hikvision Products on Aug 09, 2019
Just days from the US government ban going into effect, US mega-corporation Stanley has dramatically increased its imports of banned Hikvision...
Alibaba Makes Major Investment Into Uniview on May 30, 2019
China's e-commerce and cloud services giant Alibaba has bought 15% of the shares of Uniview's parent company, TransInfo, in a deal worth ~$500...
Dahua USA Celebrates 5 Years of Errors on May 22, 2019
Dahua USA is, in their own words, 'celebrating' 5 years in North America or as trade magazine SSN declared: Dahua Technology finds success in...
Hikvision Admits USA Sales Falling on Apr 22, 2019
Hikvision, in a new Chinese financial filing, has admitted that its USA sales are now falling. Less than a year after the US government passed a...
Goldman and Fidelity Funds Sell Off Hikvision, Dahua Stock Over Xinjiang on Mar 29, 2019
Major US funds run by financial giants such as Fidelity and Goldman Sachs have sold their equity stakes in Hikvision and Dahua "as scrutiny...

Most Recent Industry Reports

USA's Feevr Thermal Temperature System Examined on Mar 31, 2020
This US company has burst on to the scene, brashly naming itself 'feevr' and branding itself as a "COVID 19 - AI BASED NON CONTACT THERMAL...
JCI Coronavirus Cuts on Mar 31, 2020
JCI has made coronavirus cuts, the company told employees in an email that IPVM has reviewed. Inside this note, we examine the cuts made, the...
Add Door Operators To Fight Coronavirus on Mar 31, 2020
IPVM recommends that integrators advocate and end-users consider adding door operators to fight the spread of coronavirus. This delivers...
Video Surveillance Business 101 on Mar 30, 2020
This report explains the fundamental elements of the video surveillance business for those new to the industry. This is part of our Video...
FDA Gives Guidance on 'Coronavirus' Thermal Fever Detection Systems on Mar 30, 2020
The US FDA has given IPVM guidance on the use of thermal fever detection systems being marketed for coronavirus, as an explosion of such devices...
Worsen: Integrators Hit Even Harder By Coronavirus on Mar 30, 2020
Integrator's problems have worsened over the past 2 weeks, according to new IPVM survey results. Inside this report, we share statistics and...
Pivot3 Mass Layoffs on Mar 27, 2020
Pivot3 has conducted mass layoffs, the culmination of grand hopes, a quarter of a billion dollars in VC funding, and multiple failures to gain...
Athena CEO Criticizes 'Deplorable' 'Nitpicking', IPVM Refutes on Mar 27, 2020
UPDATE: NBC News Report Cites IPVM On Coronavirus 'Fever Detection' Cameras Athena Security's CEO Lisa Falzone has strongly objected to IPVM's...
Hikvision Admits Sanctions Harming Its Financial Performance on Mar 27, 2020
While Hikvision initially downplayed being sanctioned for human rights abuses, the company is now admitting a significant impact in a new PRC...