InPhonic nets $5M Brightstar investment

Mobile phone distributor Brightstar Corp. said it will make a $5 million equity investment in InPhonic Inc., the Washington-based online retailer of wireless products and services.
Brightstar will purchase about 2.5% of InPhonic’s outstanding shares and acquire the retailer’s distribution, inventory and fulfillment assets under terms of the strategic alliance. Further, the Miami-based distributor will become InPhonic’s exclusive provider of hardware, direct-to-consumer distribution and logistics.
InPhonic, which operates Wirefly.com, said the move would improve cash flows due to outsourced inventory management, reduce operational expenses, and enhance margins from hardware procurement. The deal is expected to close by the end of September.
“This strategic partnership with Brightstar will allow us to focus on our core competencies as an online wireless leader in customer acquisition,” said InPhonic CEO David Steinberg. “This new alliance would provide an initial cash infusion, and we believe a significant positive impact to InPhonic’s working capital and cash flow as well.”
Investors seemed unconvinced, however, as InPhonic stock slid 8 cents, or 2%, to $3.48 per share.