*West Coast Investors Acquire Micro Warehouse

Share this content:
Micro Warehouse Inc., Norwalk, CT, a $2 billion computer product cataloger, yesterday was acquired by a prominent group of West Coast investors that includes Hollywood power broker Michael Ovitz for approximately $725 million in cash. Ovitz is joined by Northwest Airlines chairman Gary Wilson, Jerome York, ex-IBM chief financial officer, Alfred Boyer, a California financier, and investment firm Freeman Spogli & Co., Los Angeles.

The terms of the agreement, which was unanimously approved by the Micro Warehouse board of directors, call for Micro Warehouse shareholders to receive $19 in cash for each Micro Warehouse share, a significant premium to its average price per share of $13 in the past 30 days. Credit Suisse First Boston and CIBC World Markets agreed to fund $320 million in senior debt financing at the deal's closing.

Jerome York will replace existing CEO and company founder Peter Godfrey when the transaction is complete, which is expected at the end of January. Godfrey could not be reached for comment. It is unclear whether he will remain with Micro Warehouse in another capacity, and company spokesman Bruce Levy said, "I can't answer that. He is no longer going to be CEO."

Other than the CEO shift, no immediate management or operational changes are expected, said Levy. No plans were announced for its future direct marketing strategy. Micro Warehouse's $2 billion computer products and accessories businesses is conducted through its various catalogs, including Micro Warehouse, Mac Warehouse, and Datacomm Warehouse, and its corresponding online sites and telemarketing operation.

Gary Wilson of Northwest said he will work closely with York, but will remain actively involved with Northwest Airlines. It's unclear what role Ovitz will play in the organization, and Levy declined to provide details. The investor could not be reached for comment at presstime.

One of the attractions to its new investors was the potential in more aggressive outbound telemarketing to build sales. The cataloger has stumbled somewhat in recent years, but its post-announcement stock price surged to close at $18.44 on Wednesday, December 22.

A tender offer will be commenced on Tuesday, which will include more details of the deal.

Next Article in Agency

Sign up to our newsletters

Company of the Week

We recently were named B2B Magazine's Direct Marketing Agency of the Year, and with good reason: We make real, measureable, positive change happen for our clients. A full-service agency founded in 1974, Bader Rutter expertly helps you get the right message to the right audience at the right time through the right channels. As we engage our clients' audiences along their journey, direct marketing (email, direct mail, phone, SMS) and behavioral marketing (SEM, retargeting, contextual) channels deliver information relevant to the needs of each stage. We are experts at implementing and leveraging marketing technologies such as CRM and marketing automation in order to synchronize sales and marketing communications. Our team of architects and activators plan, execute, measure and adjust in real time to ensure the strategy is working as needed and change things if it's not.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above