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Markets like Brightpoint's European acquisition

February 20, 2007

Financial markets are reacting positively to Brightpoint Inc.’s announcement early this morning that it will buy Dangaard Telecom of Padbord, Denmark, in a $308 million stock deal.

Shares of the Plainfield cell phone distributor traded at $11.36 late this morning, up $1.08, or 10.5 percent, from last night’s $10.28 close.

Bill Choi, managing director of New York-based investment bank Jefferies & Co., said the deal positions Brightpoint as the clear market leader in cell phone distribution.

“For a number of years, Brightpoint has largely grown through new business in the U.S.,” Choi said. “This has created the global player, the biggest player.

“You’re getting yourself into Europe in a much bigger way, nearly doubling revenue and operating profits,” he added. “I don’t think there’s much overlap in terms of customers or regions. It’s a pretty good fit.”

Brightpoint will need time to digest its latest acquisition, Choi said, especially considering the company also must wrap up the $88 million cash deal it announced Dec. 18 to acquire the U.S. and Latin American business of Coppell, Texas, rival CellStar Corp.

Once the transition is complete, Choi said, he expects Brightpoint to look to strengthen its position in Asia.

“When you look at the overall structure of the company, Brightpoint management is firmly in control, with the Dangaard people pretty much heading up Europe,” he said. “The next few months will be about integration and execution.”

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