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Brightpoint to buy European phone distributor for $308M

February 20, 2007

Brightpoint Inc. has agreed to purchase the largest wireless phone distributor in Europe for $308 million in stock—a deal that balloons the Plainfield company's annual revenue from $2.5 billion to $4.6 billion.

"It's one of those once-in-a-lifetime deals," said Brightpoint CEO Robert Laikin. "It's not often you get an opportunity like this."

Brightpoint, the biggest North American distributor and logistics provider for the wireless phone industry, is buying privately held Dangaard Telecom of Padbord, Denmark.

Dangaard's owners, a private equity firm and management, will end up with 37 percent of the combined company and three of the nine board seats. The deal will boost Brightpoint's full-time employment from about 2,200 to 3,200.

Because of the acquisition, Brightpoint over the next year might add as many as 25 people to its 50-person headquarters staff in Plainfield. In addition to that executive staff, the company employs about 800 full-time or temporary workers at Plainfield distribution centers.

The acquisition, expected to close in July, will boost the number of countries where Brightpoint operates from 15 to 25. Brightpoint and Dangaard have overlapping operations in just three countries, Sweden, Norway and Germany.

Brightpoint expects the merger will generate $8 million to $10 million in cost savings.

"In distribution, bigger is better," Laikin said. "You can drive costs out of the whole supply chain."

But he said broader strategy also played a big role. Historically, different wireless-phone networks have dominated in Europe and the United States, but that's beginning to change. In addition, phone manufacturers increasingly are seeking distributors that can handle products worldwide.

Laikin, who founded Brightpoint in 1989, will remain chairman and CEO of the merged company. Brightpoint's president and chief operating officer, J. Mark Howell, will become co-chief operating officer and president of the America's Division.The other co-chief operating officer will be Michael Koehn Milland, who now is Dangaard's chief operating officer. He also will serve as president of international operations.

Brightpoint and Dangaard announced the deal early today.

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