SoftBank makes $1.26B investment in wireless distributor Brightstar

Sprint (NYSE:S) parent SoftBank said it agreed to take a 57 percent stake in U.S. wireless device distributor Brightstar Corp. for $1.26 billion, in a deal that values the privately held company at $2.2 billion.

The deal is not really a surprise; SoftBank had confirmed in recent days it was in talks with Brightstar about making an investment.

CEO Marcelo Claure will own 43 percent of Brightstar, but SoftBank will increase its holdings of Brightstar to 70 percent "over the next five years, or upon certain events." As part of the transaction, the Buying & Innovation Group (BIG)--a joint venture created to generate savings and efficiencies for SoftBank, Sprint and Brightstar--will become a division of Brightstar.

Due to the deal, Brightstar will become the exclusive provider of handsets, accessories, and services to certain SoftBank telecommunications affiliates. Brightstar will leverage those companies to buy more than $20 billion in handsets, accessories, and services, the firms said. The companies said they will leverage Brightstar's local presence in over 50 countries to commercialize products and services offered by SoftBank, its affiliates and its investment companies. Brightstar will also have a preferential right to provide services including distribution, supply chain, handset insurance, buy-back and trade-in, multi-channel retail, and financial services to certain SoftBank telecommunications affiliates.

Brightstar purchases handsets from more than 100 manufacturers including Apple (NASDAQ:AAPL), Samsung Electronics, LG Electronics and Sony, and supplies those devices to carriers around the world. Brightstar also handles all trade-in and phone buy-back programs for SoftBank.

It's unclear how the deal will affect Brightstar's relationship with other carrier customers, including some that may be direct competitors of Sprint. For example, Verizon Wireless (NYSE:VZ) dealer Moorehead Communications and Brightstar are collaborating on Viva Móvil, a partnership between Verizon and Jennifer Lopez to sell wireless phones and services to the Latino market under the Viva Móvil brand. (Lopez is the majority shareholder of Viva Móvil, and Verizon Wireless has no monetary involvement in the company.)

A Brightstar spokesman did not immediately respond to a request for comment.

"SoftBank has a proven track-record of investing in companies that are leading innovation in their respective industries," SoftBank CEO Masayoshi Son said in a statement. "Brightstar has been a model of innovation, transforming from a regional wireless distributor into the world's leading provider of services to the wireless industry and we are excited about what that will mean for the SoftBank Group."

The deal with Brightstar comes shortly after SoftBank's mobile game subsidiary, GungHo Online Entertainment, agreed to pay $1.53 billion for a majority stake in Supercell, the Finnish game developer of the popular game "Clash of Clans." 

SoftBank's $21.6 billion deal to take control of Sprint closed in July; SoftBank now controls around 80 percent of Sprint.

For more:
- see this release
- see this Reuters article
- see this AllThingsD article

Related Articles:
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Sprint shakes up sales and marketing organizations under SoftBank
SoftBank's Son urges patience with Sprint turnaround, says it could take 2 years
SoftBank extends Sprint CEO Hesse's contract through 2018
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