ENTERS INTO AGREEMENT TO ACQUIRE CERTAIN OPERATIONS OF CELLSTAR
to acquire substantially all of CellStar's U.S. operations
and its Miami-based Latin America business for $88 million in cash
- Acquisition to enhance Brightpoint
's distribution and logistics
capabilities for Latin America
PLAINFIELD, Ind. -- December 18, 2006 -- Brightpoint
, Inc. (NASDAQ:CELL) and
CellStar Corporation (OTC Pink Sheets:CLST) announced today that they have
entered into a definitive agreement ("Definitive Agreement") for a wholly-owned
subsidiary of Brightpoint
, Inc. to acquire substantially all of CellStar's
assets and liabilities related to its U.S. operations and its Miami-based Latin
America business. CellStar's operations in Mexico and Chile and other businesses
or obligations of CellStar Corporation are excluded from the proposed
"The proposed acquisition reflects our commitment to enhance long-term
shareholder value through the execution of our growth strategy," stated Robert
J. Laikin, Chairman of the Board and Chief Executive Officer of Brightpoint
Inc. "We believe that the proposed transaction will expand our geographic reach,
broaden our product offering, and improve our overall efficiency in order to
create long-term value for all of our stakeholders. Specifically, with the
addition of the Miami-based Latin America business, we will bolster
's capabilities for providing distribution and logistic services to
customers and suppliers throughout Latin America."
"The Board of Directors of CellStar Corporation believes the divestiture of
these operations at this time is in the best interest of our stockholders and we
fully support the decision," stated Robert Kaiser, Chairman of the Board and
Chief Executive Officer of CellStar Corporation. "In addition, I am certain that
as a result of this transaction, our customers will benefit from the enhanced
capabilities, efficiencies and financial strength of the combined operations."
Overview of the Proposed Transaction
The Boards of Directors of both Brightpoint
, Inc. and CellStar Corporation have
unanimously approved the proposed transaction set forth in the Definitive
Agreement. The proposed transaction is subject to conditions set forth in the
Definitive Agreement, including, without limitation, certain regulatory,
supplier and lender approvals and approval by CellStar's stockholders. Under the
terms of the proposed transaction, Brightpoint
will pay $88 million in cash to
CellStar, subject to adjustments based on net assets as set forth in the
Definitive Agreement. The closing of the proposed acquisition is currently
expected to occur in March or April of 2007.
currently estimates that revenues from the acquired operations will
exceed $450 million in the first year following completion of the proposed
acquisition. Brightpoint also expects that the proposed acquisition will be
slightly accretive to Brightpoint's earnings per share for the first year
following completion of the proposed acquisition.
Brightpoint currently expects to fund the purchase price of $88 million (subject
to adjustment as set forth above) through a combination of unrestricted cash and
borrowings on credit facilities.
Pursuant to the proposed acquisition, Brightpoint expects to record goodwill and
other intangible assets of approximately $65 million.
Deutsche Bank Securities acted as sole financial advisor and Blank Rome
acted as legal counsel to Brightpoint.
Brightpoint, Inc. (NASDAQ:CELL) is a global leader in the distribution of
wireless devices and in providing customized logistic services to the wireless
industry. In 2005, Brightpoint handled 42 million wireless devices globally.
Brightpoint's innovative services include distribution, channel development,
fulfillment, product customization, eBusiness solutions, and other outsourced
services that integrate seamlessly with its customers. Brightpoint's effective
and efficient platform allows its customers to benefit from quickly deployed,
flexible, and cost effective solutions. Additional information about Brightpoint
can be found on its website at www.brightpoint.com, or by calling its toll-free
Information and Investor Relations line at 877-IIR-CELL (877-447-2355).
CellStar Corporation (OTC Pink Sheets:CLST) is a leading provider of logistics
and distribution services to the wireless communications industry. CellStar has
operations in North America and Latin America, and distributes handsets, related
accessories and other wireless products from leading manufacturers to an
extensive network of wireless service providers, agents, MVNOs,
insurance/warranty providers and big box retailers. CellStar specializes in
completely integrated forward and reverse logistics solutions, repair and
refurbishment services, and in some of its markets, provides activation services
that generate new subscribers for wireless service providers.
Additional information about CellStar and the proposed transaction can be found
in its press release issued today and on its website at www.CellStar.com.
Certain information in this press release may contain forward-looking statements
regarding future events or the future performance of Brightpoint. These
statements are only predictions and actual events or results may differ
materially. These risk factors include, without limitation, the satisfaction,
waiver of, or the parties' ability to complete the terms and conditions set
forth in the Definitive Agreement (as defined herein) such as: the receipt of
regulatory approvals, the receipt of third-party approvals and other closing
conditions, any failure of which may delay or prevent the closing of the
transaction; the transaction may involve unexpected costs; the expected benefits
of the transaction may not be achieved in a timely manner, or at all; the
CellStar business operations may not be successfully integrated into
Brightpoint's following the closing; disruption from the transaction may
adversely affect the parties' relationships with their customers, suppliers or
employees; and Brightpoint may be unable to achieve the expected synergies,
business and strategic objectives following the transaction. Accordingly, there
can be no assurance that the acquisition of the CellStar operations will occur.
In addition, please refer to the documents Brightpoint files, from time to time,
with the Securities and Exchange
Commission; including, Brightpoint's most recent Form 10-K and Form 10-Q and
Exhibit 99.1, thereto. These documents contain and identify important risk
factors that could cause the actual results to differ materially from those
contained in or implied by these forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking statements that
speak only as of the date these statements were made. Brightpoint undertakes no
obligation to update any forward-looking statements contained in this press
Contact: Brightpoint, Inc.
J. Mark Howell