CHS Electronics to Acquire Merisel's Foreign Divisions
May 12, 2011
EL SEGUNDO, Calif. -- Struggling computer wholesaler Merisel Inc. agreed to sell its European, Latin American and Mexican businesses to CHS Electronics Inc. in a transaction valued at about $160 million, the companies said Friday. Included in the sale are Merisel's distribution businesses in Austria, France, Germany, Great Britain, Switzerland and the Netherlands, an export operation in Miami that serves Latin America and a distribution operation in Mexico. Together, the businesses employ about 1,000 workers and are expected to generate revenue of about $1.5 billion in 2011, the companies said. The acquisition will push CHS's sales in South America to nearly $1 billion, and nearly double the size of the Miami distributor of microcomputers, peripherals and software products, which had sales of $937 million in 2010. CHS said it would fund the purchase using a combination of cash, financing and the assumption of about $30 million of Merisel debt. Merisel's remaining operations will consist of its U.S. and Canadian distribution operations, the ComputerLand Franchise and Datago Aggregation segments, and a minority interest in a distribution business in Russia. These units produced $4.6 billion in revenue in 2010. The sale will help the El Segundo, Calif., wholesale distributor of computer hardware and software to focus on and fund its North American operations. The company has produced a string of losses, and earlier this month the Standard & Poor Corp.. Ratings Group lowered its ratings on Merisel, expressing concern about its dependence on major asset sales, restructuring or refinancing to meet its financial needs. After news of the sale, Merisel stock rose 25 cents to $2.6875 a share in late-morning trading on the Nasdaq Stock Market, while CHS stock rose 56.25 cents to $12.1875 a share.
