Softbank Invests $1.26B in Brightstar

Softbank, Sprint's spend-happy new owner, has invested $1.26 billion to take a majority stake in wireless distributor Brightstar.

The Japanese announced the acquisition on Friday, October 18, noting that it is designed to centralize purchasing for Sprint Corp. (NYSE: S) and SoftBank Corp. 's wireless units and affiliates.

The deal values Brightstar at $2.2 billion and gives Softbank control of about 57 percent of the company with plans to grow its ownership to 70 percent over the next five years. Brightstar founder and CEO Marcelo Claure will own the remaining 43 percent if the deal closes as expected later this year.

Why this matters
Since Softbank closed its $21.6 billion acquisition of Sprint in July, it hasn't let up on its spending spree. The new parent spent another $500 million between August and September to raise its stake in Sprint to more than 80 percent, and, on Tuesday, it forked over another $1.5 billion for a majority stake in tablet game developer Supercell.

The deal with Brightstar means both it and Sprint would have more bargaining power with device makers, something Sprint needs as it's often trailed its larger competitors in getting the latest and greatest devices, including the iPhone. (See: iPhone 5: Which 4G Carrier to Pick?)

Verizon Wireless chose Brightstar as its exclusive handset provider in April, shortly before Claure joined the carrier and J.Lo on stage at the CTIA show. The companies didn't say whether its new relationship with Sprint will affect its other partners in the US. (See: Verizon Taps Brightstar for Handset Distribution.)

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— Sarah Reedy, Senior Editor, Light Reading

DOShea 10/20/2013 | 9:02:37 AM
Re: Good deal I would think it has to affect Brightstar's standing with other carriers if Softbank and Sprint really do see the deal as a way to get a hot, new device before another carrier. I think that might be the definition of "conflict of interest."
Kruz 10/19/2013 | 7:41:07 AM
Re: Good deal This will be beneficial for BrightStar as it would be the exclusive handsets provider for some of Softbank‘s network and would yet be another step in Softbank's expansion outside Japan.
DanJones 10/18/2013 | 6:48:14 PM
Supercell deal Is another signifier of the app bubble. It had already raised $770M, now another $1.5B! Supercell is the most heavily funded startup in mobile right now. Hope their in-app advertising capabilities are superb!
Sarah Thomas 10/18/2013 | 2:50:42 PM
Good deal Must be fun to be a billionaire and say, "I like games" then buy a company, and "I want all the coolest gadgets," and buy the company... I am sure that's exactly how it went down.

But, really, the big handset makers like Apple and Samsung have a lot of say in the market. This will shift the balance in Softbank and Sprint's favor.

I wonder if it'll effect Brightstar's other relationships, which are plentiful. They say it won't, but when Softbank is up to 70% it could be a different story.
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