Systemax Eyes Circuit City Assets For Online Consumer Electonics Sales
In a brief statement, the Port Washington, N.Y.-based company said that the "completed transaction would position Systemax to extend leadership in online sales of value-priced, branded consumer electronics."
The so-called stalking horse agreement bid is an initial offer for a bankrupt company's assets from an interested buyer chosen by the company.
Terms of the agreement also call for Circuit City to receive a portion of Systemax's revenue from the Circuit City Web site for 30 months. The purchase is subject to bankruptcy court approval and auction procedures. Systemax said it has submitted the agreement for approval to the Bankruptcy Court for the Eastern District of Virginia, Richmond Division.
Systemax said that it will not go through with the agreement if a higher or better bid for the assets is submitted and approved by the court. The company also said that if Circuit City's e-commerce business is sold to another buyer for a higher or better price, or if Circuit City terminates the auction, Systemax will be entitled to break-up fees and expenses.
The deal would complement the company's Miami, Fla.-based TigerDirect subsidiary, a large B2B e-commerce site that sells PCs, computer supplies, consumer electronics and industrial products. In Europe, Systemax operates online MISCO, an online IT product and consumer electronics retailer.
Systemax also upped its bricks-and-mortar presence when it bought CompUSA in January 2008 in a deal said to be worth approximately $31 million. Under terms of that deal, Systemax bought 16 CompUSA stores, its brand name and e-commerce sites. Systemax said part of its strategy behind the purchase was to complement TigerDirect e-commerce site and retail stores.