Ingram buys Tech Pacific

Distribution giant Ingram Micro Inc has acquired Tech Pacific in a $700 million (US$493 million) cash deal.

The acquisition gives majority owner CVC Asia Pacific (with a 58.5 percent share) an exit from the distributor. Hagemeyer owns 31.5 percent and management 10 percent.

Tech Pacific's plan to IPO on the Australian Stock Exchange has been cancelled following the sale.

Tech Pacific generated $3.1 billion in revenues and operating margins of around two percent of revenues for the 2003 fiscal year. EBITDA was $63.23 million.

The distributor employs 1800 people across the region and operates 15 distribution centres in Australia, New Zealand, India, Hong Kong, Malaysia, Singapore and Thailand. It deals with more than 25,000 resellers and 75 vendors with a portfolio of more than 10,000 products.

Ingram CEO Hans Koppen, said the acquisition was a giant leap forward in the company's development in Asia-Pacific.

"Tech Pacific is a strong, profitable player in some of the region's key markets. It is the market leader in two of the region's most stable markets -- Australia and New Zealand -- as well as the rapidly growing, emerging market of India. Sales have outperformed the overall market and every country-based business unit generated in operating profit last year," he said in a statement.

Ingram Micro president Greg Spierkel said that TechPac CEO Shailendra Gupta and CFO Guy Freeland would be retained. Alain Monie, president Ingram Micro Asia Pacific will also stay on.

CVC Asia Pacific MD Andrew Cummins said in a statement: "The sale of Tech Pacific represents another successful exit for CVC Asia Pacific and underpins a strong performance in our first Asia Pacific fund."

Ingram Micro Asia Pacific would nearly double in size in revenue terms and would become the leading IT distributor in Australia. Its profitability would improve and regional operating margins would strengthen in the 2005 fiscal year, the company said.

By product, Ingram Micro had a large "components mix" while Tech Pacific was "stronger in software," Ingram said.