Analysis & Comment

RRJ Capital-led group near $4 billion deal for HNA's Ingram Micro: source

(Reuters) – A consortium led by Asian private equity group RRJ Capital is finalizing a deal with Chinese conglomerate HNA Group to invest $4 billion in HNA unit Ingram Micro Inc for a controlling stake in the U.S. electronics distributor, a source said on Monday.

Debt-laden airlines-to-finance conglomerate HNA has launched a series of asset sales including real estate and stakes in hotel groups over more than a year following China’s crackdown on aggressive dealmaking firms.

HNA bought Ingram for $6 billion as part of the $50 billion worth of deals it had announced in the past few years.

The source, who had direct knowledge of RRJ’s plan and did not wish to be identified as the talks are private, said the investment group will inject funds via an HNA convertible bond that will give it control of Ingram Micro. The deal is set to be firmed up in a few days, the source said.

RRJ Capital was co-founded by brothers Richard and Charles Ong. Richard is a former Goldman Sachs dealmaker, while Charles is a former chief investment officer of Singapore state investor Temasek Holdings. It runs operations based out of offices in Hong Kong and Singapore.

RRJ Capital, HNA Group and Ingram Micro were not available for comments.

The identity of other consortium members was not immediately known.

The private equity firm and HNA have been partners before.

This year, RRJ Capital completed a deal to purchase all outstanding shares in Swiss-based airline caterer Gategroup Holding AG from HNA. Temasek remained invested in Gategroup through a mandatory exchangeable bond.

Reuters reported last year that HNA was in talks to sell Ingram Micro to private equity firm Apollo Global Management LLC (APO.N).

Subsequently, HNA Technology Co Ltd (600751.SS), an HNA unit said it was in preliminary talks to sell Ingram Micro as part of its parent group’s moves to trim operations.

HNA Group had met bankers in January to detail the latest assets it was putting on the block as it looked to raise funds and stave off an intensifying cash crunch.

Bloomberg earlier reported news of HNA’s talks with the RRJ-led group.

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