SoftBank Corp’s purchase of a 57% stake in U.S distribution giant Brightstar Corp for $1.26 billion has put the brakes on the sale of 20:20 Mobile but will not derail it, sources said this week.
Brightstar Corp has been in talks with Doughty Hanson, the private equity investor which owns 20:20 Mobile for nearly a year, and the deal is believed to be close to completion.
The Japanese telecoms giant’s acquisition of a majority shareholding in Brightstar, announced last week, will make Brightstar Corp a major force in the smartphone distribution market. SoftBank, which owns 80% U.S. mobile operator Sprint Corp, also has an option to increase its shareholding to 70% over the next five years.
Brightstar founder and CEO Marcelo Claure will initially retain 43% ownership in the company but his share will decline as SoftBank increases its stake.
Sources said the long awaited sale of Crewe based 20:20 Mobile had been delayed but only whilst Softbank’s acquisition is completed. One rival distributor source said: ‘The sale is still on as Brightstar still needs to build presence in Europe but it has delayed it. But in general this is good news for 20:20 since Softbank will give Brightstar huge purchasing power because they will be able to buy in much greater volumes, allowing them to be really competitive on prices.’
One manufacturing source said: ‘Every mobile phone manufacturer will want to be going to Brightstar first because of its size and reach. This will give Brightstar a lot of muscle.’
Softbank said of the deal: ‘By making Brightstar a subsidiary, SoftBank aims to strengthen its purchasing scale for mobile devices and further increase competitiveness both in Japan and the US.’ The acquisition came just a few days after SoftBank announced that it was spending $1.5bn for a 51% stake in Finnnish mobile games maker Supercell.
The move will see Brightstar become a buyer of an estimated $20 billion worth of mobile equipment and services per year by combining the buying power of Brightstar’s customers in 50 countries with that of SoftBank’s various telecom affiliates. Under the agreement, Brightstar will become the exclusive provider of handsets to certain SoftBank affiliates.
20:20 Mobile was bought from the Caudwell Group in 2006 for £350m by Doughty Hanson. If the acquisition by Brightstar goes ahead, it will give it an extensive European network via 20:20 Mobile’s operations across 14 countries. As well as the UK, 20:20 Mobile also trades in Finland, Germany, Hungary, Italy, the Netherlands, Norway, Spain, Sweden, Poland and Portugal.
Author: Carol Millett