By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Miami – Japan’s SoftBank, fresh from the summertime purchase of 72 percent of Sprint, will spend $1.26 billion to acquire a 57 percent stake in telecom distributor and services company Brightstar to expand the distributor’s sales and create efficiencies.
SoftBank, whose businesses include a Japan cellular carrier, signed a definitive agreement with Brightstar, which operates globally and earned more than $7 billion in revenues for the 12 months ending June.
Brightstar president/CEO Marcelo Claure will keep his position and will own around 43 percent of Brightstar shares on an outstanding basis after the transaction, which is expected to close by year’s end following regulatory approvals.
Over the next five years, or upon certain events, SoftBank will increase its ownership to 70 percent.
As part of the deal, the two companies and Sprint will create a joint venture, called Buying and Innovation Group (BIG), to generate savings for the three companies. BIG will be a division of Brightstar.
In addition, Brightstar will become the exclusive provider of handsets, accessories and services to certain SoftBank telecommunications affiliates, with Brightstar buying more than $20 billion in handsets, accessories and services to make it “one of the leading buyers of mobile devices and accessories in the world,” SoftBank said
Brightstar will also get a preferential right to provide services, including distribution, handset insurance, buy-back and trade-in programs, multi-channel retail, and financial services to certain SoftBank telecom affiliates
The two companies will also tap into Brightstar's local presence in more than 50 countries to offer products and services offered by SoftBank, its affiliates, and its investment companies to more than 200 mobile network operators, 40,000 retailers, and 15,000 enterprises, the company said.
"Our alliance with SoftBank provides additional products and services to Brightstar's already best-in-class services allowing us to better serve our customers in more than 125 countries where we do business," said Marcelo Claure, Brightstar’s founder, chairman and CEO.
SoftBank is financing the transaction with cash on hand. SoftBank also intends to guarantee Brightstar's outstanding $350 million senior unsecured notes due 2016 and $250 million senior unsecured notes due 2018.
Brightstar's global headquarters will remain in Miami.
During the summer, SoftBank acquired 72 percent of financially ailing Sprint by paying stockholders $16.6 billion. SoftBank also agreed to invest another $5 billion into the company to help Sprint upgrade its networks and expand LTE service.
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