CHS Electronics Announces Agreement to Acquire Six Companies in Europe and Latin America
-- The Six Have Combined Projected 1997 Revenue of $640 Million -- Will Boost CHS Revenues in Eastern Europe to $1 Billion in 1998 -- CHS Position Strengthened in Latin America, Spain
November 17, 1997 08:12 AM
MIAMI, Nov. 17 /PRNewswire/ -- CHS Electronics, Inc. CHSE , the world's third-largest distributor of microcomputer products, today announced agreements to acquire four Eastern European, one Western European and one Latin American distribution companies with expected 1997 revenues of approximately $640 million.
Execution of the agreements will increase CHS's expected 1998 revenues in Eastern Europe, where it is already the largest distributor of its kind, to approximately $1 billion. The acquisitions will also reinforce the company's position as the leading computer distributor in Latin America and strengthen its position in Spain.
Claudio Osorio, chairman and chief executive officer of CHS, said the company expects to close some of the acquisitions by year-end and to have all of them closed before the end of the first quarter of 1998.
The companies to be acquired include:
-- TH Systems, which is based in the Czech Republic, is expected to have
1997 sales of $150 million, and distributes to more than
3,000 resellers in the Czech Republic, Hungary, Poland and Slovakia.
It is second in size only to CHS itself among distributors in the
region it serves, and completion of the acquisition will make CHS the
largest distributor in all four countries.
-- Merisel Russia, a Moscow-based former subsidiary of Merisel, Inc. which
serves 3,000 dealers and is expected to have 1997 sales of $60 million.
With this acquisition CHS will become the largest distributor in its
field in Russia.
-- Arena and Armada, two Istanbul-based distribution companies. They
serve a total of more than 3,000 resellers, and combined expected 1997
sales of $150 million make them, together, the largest computer
distributor in Turkey.
-- ARC Spain, which serves more than 4,000 resellers from its base in
Madrid, is expected to have $130 million in sales this year, and is the
third-largest distributor in Spain.
-- Micro-Informatica, which is based in Miami, serves more than
3,000 resellers throughout Latin America, and is expected to have 1997
revenues of $150 million.
"The agreements that we are announcing today are a natural next step in CHS's successful strategy of growing aggressively both through acquisitions and through increases in the sales and efficiency of our own operations," Mr. Osorio said. "These acquisitions will do two things that are essential to our strategy: further strengthening CHS where it is already the leader, and moving the company closer to a leadership position in emerging markets of great potential."
He said that completion of the six acquisitions will give CHS pro forma 1997 sales of $40 million in Slovakia; $60 million in Hungary; $80 million in Poland; $180 million in Russia; $180 million in Spain; $200 million in the Czech Republic; and $1.3 billion in Latin America.
Mr. Osorio said also that, midway through the fourth quarter, CHS Electronics revenues remain strong and are consistent with expectations.
Miami-based CHS Electronics is a leading international, full-service distributor of microcomputers, peripherals and software products to more than 98,000 resellers in more than 38 countries in Europe, Latin America, Asia and Africa. Unlike other computer wholesalers, CHS Electronics distributes a limited product line for a limited number of leading computer manufacturers and does so only outside the United States. The company believes that its "focused distribution" enables it to respond more quickly to customers, provide better service, and reduce inventory and working capital requirements. CHS believes it is the largest microcomputer distributor in Latin America and Europe, number one in Germany and France and number two in the United Kingdom and Switzerland.
To receive additional information on CHS Electronics, Inc. via fax at no charge, dial 1-800-PRO-INFO and enter code CHSE.
The above statements made by CHS Electronics, which are based on current expectations, may differ materially from actual results. Among factors that could cause actual results to differ materially are changes in business conditions, growth in the personal computer industry and the general economy; competition; changes in product mix; and the risk factors listed by CHS Electronics' reports filed with the Securities and Exchange Commission. SOURCE CHS Electronics, Inc.
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