EXTON, Pa., April 30 /PRNewswire/ -- Intelligent Electronics, Inc. (NASDAQ:INEL)
of Exton, Pennsylvania, announced today that a definitive agreement has been signed with Ingram Micro Inc. (NYSE:IM)
, headquartered in Santa Ana, California, to acquire IE's indirect business, the Reseller Network Division (RND), for approximately $78 million, subject to adjustment.
Intelligent Electronics expects, on a preliminary basis, that the sale will result in a pre-tax gain of approximately $25 million before potential purchase price adjustments and transaction-related costs. The purchase price will be payable in cash and assumption of liabilities, based on RND's balance sheet at time of closing. Stock structures of both companies will remain unchanged.
According to Richard D. Sanford, Chairman and CEO of IE, "As a result of this transaction, the company will gain a single focus on the direct business market," Sanford said. IE presently operates in two business segments, indirect and direct. The indirect business segment is addressed through RND, which provides distribution of microcomputers and related equipment to its network of computer resellers. The direct business segment is addressed through XLSource, IE's technology sales organization; and XLConnect Solutions, Inc., IE's 80%-owned professional services subsidiary.
Doug Antone, president of Ingram Alliance, added, "This transaction will provide Ingram Micro with incremental volume opportunities, and allows us to realize efficiencies through the integration of RND's premier service programs, including the National Service Network, the Business Technology Centers, and the Intelligent Systems Group affiliates."
Additionally, Ingram Micro will provide IE's XLSource with its product requirements over the next three years. Said Sanford, "The transaction represents the beginning of a strategic relationship between our two companies. XLSource will benefit from competitive pricing, a more comprehensive product offering, configuration and distribution services. The agreement will enable XLSource to do what it does best, which is provide technology support to its customers." Sanford indicated that in light of this transaction, it is unlikely that IE will be able to spin-off XLConnect tax free to shareholders. He said the company is continuing to evaluate strategic alternatives to enhance shareholder value.
The transaction, expected to close in approximately three months, is subject to required government approvals, approval by Intelligent Electronics' shareholders, and other customary conditions.
Ingram Micro Inc. (NYSE:IM)
, headquartered in Santa Ana, Calif., is the world's largest wholesale distributor of technology products and services, with 1996 sales of more than $12 billion. The company operates in 19 countries and distributes more than 36,000 products to over 100,000 resellers in 120 countries.
At the completion of the transaction, IE will own 80% of the outstanding common stock of XLConnect and 100% of XLSource, both of which sell directly to businesses nationwide.
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Source: Intelligent Electronics, Inc.
CONTACT: Fran Barsky, Director of Investor Relations, 610-458-6668,
fbarsky@intelect.com, or Kent Redding, Director of Marketing Communications,
303-486-5251, or kreddin@intelect.com, both of Intelligent Electronics, or
Kirsten Frosh, Media Relations, 714-566-1000, ext. 2727, or Kim Strohm,
Investor Relations, 714-566-1000 ext. 5219, both of Ingram Micro