SoftBank to spend $1.26 billion for majority Brightstar stake
NEW YORK (Reuters) - Japan's SoftBank Corp said on Friday it agreed to pay $1.26 billion for a 57 percent stake in privately held cellphone distributor Brightstar Corp as it looks to boost its bargaining power with handset makers.
SoftBank, which owns 80 percent of No. 3 U.S. mobile operator Sprint Corp, said under the agreement its ownership of Brightstar would increase to 70 percent over the next five years, or upon certain unspecified events.
SoftBank had announced earlier this week it was in talks with Brightstar. SoftBank's billionaire founder, Masayoshi Son, has said one of the key benefits of the Sprint deal would be to bolster the group's position with handset makers, an industry dominated globally by Samsung Electronics Co Ltd and Apple Inc.
Earlier this week, SoftBank said it spent $1.5 billion for a 51 percent stake in Finnish mobile games maker Supercell, valuing the small maker of hit games "Clash of Clans" and "Hay Day" at $3 billion.
The Brightstar transaction, which has been approved by SoftBank's board, will be subject to regulatory approval, according to the companies. They expect to close the deal by the end of 2013.
SoftBank said it is financing the deal with $1.26 billion in cash on hand and intends to guarantee Brightstar's outstanding $350 million senior unsecured notes due 2016 and $250 million senior unsecured notes due 2018.
Under the agreement, Brightstar will become the exclusive provider of handsets to certain SoftBank affiliates.
Brightstar has a presence in over 50 countries, and generated earnings before interest, taxes, depreciation and amortization of about $260 million on revenues of more than $7 billion for the 12 months ended June 2013, the companies said.
Brightstar acts as a wholesaler between manufacturers of phones, tablets and accessories and wireless operators and retailers.
Goldman, Sachs was financial adviser to Brightstar, and Cleary Gottlieb Steen & Hamilton LLP and K&L Gates LLP served as legal counsel. The Raine Group LLC advised SoftBank and Morrison & Foerster LLP acted as lead counsel to SoftBank.
(Reporting by Sinead Carew; Editing by Gerald E. McCormick and Jeffrey Benkoe)
