Ameriquest, Computer 2000's loss-making US subsidiary, announced a management buyout (MBO) from its German parent yesterday, the same day as Tech Data Corporation completed the acquisition of Computer 2000.
Ameriquest's senior management, including chief executive Alex Kramer and the chief financial officer, Jon Jensen, are heading Listen Group Partners LLC and acquiring the 36.4m shares owned by Computer 2000. Listen Group says it has a new $10 million bank credit line for Ameriquest and Computer 2000 is sweetening the deal by contributing some $28 million via intercompany debt and an additional $3 million in cash. Ameriquest has agreed to pay $250,000 in transaction costs.
Kramer was upbeat about Ameriquest's newly acquired independence. "This should put to rest any rumours about the future of Ameriquest," he said. "Our customers, vendors and employees now know that Ameriquest will not just survive, but will have a stable foundation for future growth." Jensen said: "We have a stronger balance sheet in place now in terms of equity to total assets than at any other time during my years with Ameriquest. Now we can concentrate on growing the business along the path we started almost a year ago."
In fact, Ameriquest's performance to date is nothing short of disastrous, For the quarter ended 30 June, it anticipates reporting sales between $18 million and $19 million, but to achieve and maintain profitability, sales must grow by a minimum of 20 per cent. The company has been an appalling drain on Computer 2000's coffers. It shed staff and facilities after losing $45 million in the financial year to September 1997, pushing Europe's largest distributor into the red.
Computer 2000, formerly known in the UK as Frontline Distribution, admitted earlier this year that it had failed to crack the US market and that Ameriquest, once seen as a bridgehead into North America, was up for grabs.
Tech Data is the world's second largest distributor. Its acquisition of Computer 2000, the number three player, creates a $12 billion global distribution company and provides a new window into European channels that are dominated largely by Computer 2000 and Ingram Micro.
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