Japan-based SoftBank Corp has paid $1.26 billion to acquire 57 percent stakes in cellphone distributor Brightstar Corp.
SoftBank announced the deal on Friday, October 18, which it hopes to give a fillip to its presence in the U.S. mobile market. SoftBank already has 80 percent stakes in Sprint, which is among the top five network operators in the U.S.
According to the terms of the agreement, SoftBank's ownership of Brightstar will increase from 57 percent to 70 percent by 2018.
With operations in more than 50 countries worldwide, Brightstar is a Florida-based, privately-held company which distributes tablets, phones and accessories directly from manufacturers to retailers and mobile operators.
"SoftBank's investment in Brightstar solidifies our position as the leading distribution, services, and innovation company in the world for the wireless industry," said Brightstar founder Marcelo Claure.
Claure will continue to be the chairman and chief executive of Brighstar, post the deal.
Additionally, Claure will also retain 43 percent ownership in Brighstar initially; however, his stakes will decrease as SoftBank's stakes increases.
Moreover, under the terms of the transaction, Brighstar will have the distinction of being the exclusive provider of handsets to some SoftBank affiliates.
With an annual revenue of $7 billion, Brighstar has a wide footprint worldwide and as a result of its reach, both SoftBank's affiliates and the distributor's combined customers have immense buying power.
"When you have that level of buying power it puts you at the table, not just from a savings perspective, but also when device manufacturers want to talk to you about the latest and greatest products," said the person who hopes the deal will start to level the playing field with bigger operators and SoftBank.
Even though SoftBank's board has approved of the Brighstar deal, it is still subject will to regulatory approval. The deal is expected to close by the end of this year.
