Brightpoint, the U.S. market's top cellular distributor, will further expand its U.S. and Latin American presence with the planned acquisition of rival CellStar's U.S. operations and most of the company's Latin American assets.

Brightpoint will pay CellStar $88 million in cash upon closing, which is expected in March or April.

The acquisition will boost Brightpoint's top-line revenues by $450 million in the first year, president Mark Howell said. Brightpoint's global revenues in 2005 were $2.1 billion.

Brightpoint president Mark Howell told TWICE that the acquisition will expand his company's geographic presence in Latin America beyond its current presence in Columbia, give it a presence in the handset insurance-replacement business in the U.S., gives it some additional tier two and tier three carrier accounts in the U.S., and expand the company's relationship with handset provider Motorola. Brightpoint will also gain efficiencies, acquire CellStar's reverse-logistics customers, and acquire relationships with CellStar's portable GPS suppliers, Howell added.

In the past year, CellStar has been selling off operations to regain financial strength and in 2005 closed its Asia-Pacific operations. For the three quarters ending August 31, 2006, the company reported net income of $5.8 million compared to a net loss of $21.3 million during the year-ago period. For the third quarter, CellStar reported consolidated net income of $1million compared to a net loss of $7.6 million in 2005.

Release Date: 
2007-01-08 07:00:00
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Abstract Web: 
Brightpoint, the U.S. market's top cellular distributor, will further expand its U.S. and Latin American presence with the planned acquisition of rival CellStar's U.S. operations and most of the company's Latin American assets. Brightpoint will pay CellStar $88 million in cash upon closing, which is expected in March or April.
Article Type: 
News
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238897
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