Ingram Micro Stock Drops After Platinum Equity Affiliate Launches 13.1M Share Offering

Shares of Ingram Micro Holding Corporation (NYSE:INGM) declined 3.8% in after-hours trading on Tuesday following the announcement of a significant secondary stock offering by one of its major shareholders.

Ingram Holdco, LLC, an affiliate of private equity firm Platinum Equity, LLC, has initiated a secondary offering of 13,125,000 shares of Ingram Micro's common stock, according to a company statement. The selling stockholder will receive all net proceeds from the sale.

Offering Details

The offering is being managed solely by Goldman Sachs & Co. LLC, which is acting as the underwriter. The terms include granting the underwriter a 30-day option to purchase up to an additional 1,968,750 shares from the selling stockholder.

Ingram Micro itself is not selling any shares in the transaction and will not receive any of the proceeds. The sale is being conducted pursuant to an automatic shelf registration statement filed with the U.S. Securities and Exchange Commission.

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Company Repurchase and Market Impact

In conjunction with the offering, Ingram Micro announced its intention to repurchase 625,000 shares from the underwriter. The price per share for the buyback will be the same as the price at which the underwriter purchases the shares from Ingram Holdco.

This repurchase is part of the company’s existing share buyback program and will be funded with cash on hand. While the offering's closing is a condition for the repurchase, the reverse is not true. Secondary offerings can place downward pressure on a stock's price as the market absorbs the new supply of shares, and a concurrent buyback can be a measure to provide some support.