Spots,
Gives an idea of present market size. I get the impression that there are many Indian software programers.
NW
Subj: CHS Electronics to Purchase a Majority Interest in...
Date: 5/29/98 9:49:38 AM Eastern Daylight Time
CHS Electronics to Purchase a Majority Interest in Largest Distributor in India, Operations in Asia and The Middle East
Redington Acquisition Gives CHS A Major Entry Into Vast India Market
Three Aptec Companies Serve Egypt, Saudi Arabia and Dubai
Hong Kong Operation Will Arrange Purchases for Private-Label Business
MIAMI, May 29 /PRNewswire/ -- Taking three important steps forward in its penetration of the emerging microcomputer markets beyond Latin America and Europe, CHS Electronics, Inc. (Nasdaq: CHSE) today announced agreements to acquire a majority interest in the largest distributor in India, the only distribution operation with a multi-national presence in the Middle East, and a Hong Kong-based company engaged in the procurement of computer products from more than a hundred manufacturers in Asia.
CHS Electronics, a leading international distributor of microcomputer products, identified its latest acquisitions as:
-- Redington Private Limited, which with seven offices and sales of $65
million in its most recent fiscal year is the largest microcomputer
distributor in India, distributing the products of leading vendors
including Hewlett-Packard, Seagate and Microsoft to 200 resellers and
subdistributors.
-- Aptec, which is made up of three companies that distribute the products
of vendors including Compaq, Hewlett-Packard, Microsoft and 3Com to
3,000 resellers in Egypt, Saudi Arabia and Dubai and reported $20
million in sales last year.
-- Lung Electronics Limited, based in Hong Kong and an established
procurement source for the private label business of Frank & Walter
Computer GmbH, a German-based distribution company that became part of
CHS through a 1997 acquisition. Lung Electronics arranges purchases of
components throughout Asia and has strong relationships with important
manufacturers.
CHS Electronics is purchasing a majority interest in Redington, approximately 95 percent of Aptec and all of Lung Electronics. The Redington acquisition has been approved by regulatory authorities in India. The prices of Redington and Aptec will be based on future performance, and all three companies will be paid for in CHS shares and cash. The Aptec acquisition has already closed, and the others are expected to close within 90 days.
Claudio Osorio, chairman and chief executive officer of CHS Electronics, said Redington and Aptec together are expected to have 1998 sales of $130 million, adding that CHS expects its pro forma sales to total $680 million in the Asia/Middle East region this year.
"CHS's strategy calls for major expansion in Asia and the Middle East, and these acquisitions are an important step toward the achievement of that goal," Mr. Osorio said. "Redington, as the largest distributor in India, makes CHS the leader in an undeveloped market of enormous potential. Aptec is the only distributor that has a regional presence in the Middle East rather than being limited to single country."
Mr. Osorio said Lung Electronics will strengthen the procurement capabilities needed to support CHS's rapidly growing worldwide private-label business. The Lung Electronics acquisition also increases the company's ability to control its procurement process, he said. Earlier this year, CHS announced the creation of a private-label company that will be a wholly owned subsidiary with offices in Hong Kong, The Netherlands and Miami. This new company is to be a third-party supplier responsible for products purchased in Asia and also for brand development, sourcing, marketing and logistics.
"Lung Electronics has developed valuable long-term relationships in buying from more than 100 Asian manufacturers of computer products," he said. "We expect these relationships to be valuable assets as we develop our private- label business."
Miami-based CHS Electronics, ranked number 320 on the latest Fortune 500 list of the largest U.S.-based industrial corporations, is a leading international, full-service distributor of microcomputers, peripherals and software products to more than 110,000 resellers in 42 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.
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 regarding pro forma 1998 sales made by CHS Electronics are based on current expectations and 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.
CO: CHS Electronics, Inc.; Redington Private Limited; Aptec; Lung Electronics Limited
ST: Florida
IN: CPR
SU: TNM
05/29/98 09:44 EDT prnewswire.com |
