SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: April 14, 1997
MERISEL, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-17156 95-4172359
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation or Number) Identification Number)
organization)
200 Continental Boulevard
El Segundo, CA 90245-0984
(Address of principal executive offices)
(Zip code)
(310) 615-3080
(Registrant's telephone number, including area code)
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<PAGE>
Item 2. Acquisition or Disposition of Assets
On March 31, 1997, Merisel, Inc., a Delaware corporation (the
("Company") completed the sale of substantially all of the assets
of its wholly-owned subsidiary Merisel FAB, Inc., a Delaware
corporation ("Merisel FAB"),to ComputerLand Corporation
(ComputerLand), a wholly-owned subsidiary of SYNNEX Information
Technologies, Inc., a California corporation ("Synnex"). Merisel
FAB operates the Company's Franchise and Aggregation
Business ("FAB"). The sale was effective as of March 28, 1997,
pursuant to a Purchase Agreement (the"Purchase Agreement") dated
January 15, 1997, as amended, among the Company, Merisel FAB,
Computerland and Synnex.
The sale price, computed based upon the February 21,
1997 balance sheet of Merisel FAB was approximately $31,992,000
consisting of ComputerLand assuming $11,992,000 of trade
payables and accrued liabilities and a $20,000,000 extended
payable due to a third party. As part the sale, the Company
agreed to extend rebates to Synnex on future purchases at a
defined rate per dollar of purchases, not to exceed $2,000,000.
The purchase price is subject to adjustments based upon Merisel
FAB's March 28, 1997 balance sheet. In the quarter ended
December 31, 1996, the Company recorded an impairment charge of
$2,033,000 to adjust Merisel FAB's Assets to their fair value.
For additional information see the March 31, 1997 press release
of Merisel, Inc.,a copy of which is attached hereto as an exhibit.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired.
Not Applicable
(b) Pro Forma Financial Information
The Following unaudited pro forma financial statements are filed
with this report:
Pro Forma Condensed Consolidated Balance
Sheet as of December 31, 1996................................. Page 4
Pro Forma Condensed Consolidated Statements of Earnings:
Year Ended December 31,1996................................... Page 5
Year Ended December 31,1995................................... Page 6
Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements....................................... Pages 7-8
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<PAGE>
The unaudited Pro Forma Condensed Consolidated Balance Sheet
of the Company as of December 31, 1996 reflects the financial
position of the Company after giving effect to the disposition
of substantially all of FAB as discussed in Item 2 and assumes
the disposition took place on December 31, 1996. The Pro Forma
Condensed Consolidated Statements of operations for the years
ended December 31, 1995 and December 31, 1996 assume that the
disposition occurred on January 1, 1995 and January 1, 1996, respectively
and are based on the operations of the Company for the years
ended December 31, 1995 and December 31, 1996.
The unaudited pro forma condensed consolidated financial
statements presented herein are shown for illustrative purposes
only and are not necessarily indicative of the future financial
position or future results of operations of the Company, or of
the financial position or results of operations of the Company
that would have actually occurred had the transaction occurred as
of the date or for the periods presented.
The unaudited pro forma condensed consolidated financial
statements should be read in conjunction with the historical
financial statements and related notes of the Company.
(c) Exhibits
2.1 Purchase Agreement dated as of January 15, 1997
by and among Merisel, Inc., Merisel FAB., Inc., Syn
Fab, Inc., and Synnex Information Technologies, Inc.(1)
2.2 Amendment No. 1 to Asset Purchase Agreement dated
as of March 6, 1997. (1)
99.1 Press release of Merisel, Inc. Dated
March 31, 1997.
- -----------------
(1) Incorporated herein by reference to the Annual Report
on Form 10-K of the Company for the annual period ended
December 28, 1996.
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<PAGE>
<TABLE>
PRO FORMA FINANCIAL INFORMATION
MERISEL, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
<CAPTION>
Pro Forma
Adjustments
Historical
12/31/96 FAB Other Pro Forma
<S> <C> <C> <C> <C>
Current Assets:
Cash & Cash Equivalents $ 44,678 $44,678
Accounts Receivable (net of
allowances) 168,295 $6,850(a) 161,445
Inventories 392,557 392,557
Prepaid Expenses 16,925 16,925
Income Taxes Receivable 2,183 2,183
Deferred Income Tax Benefit 482 482
-------- ------- -------- -------
Total current assets 625,120 6,850 618,270
Property and Equipment,
Net 61,430 542(a) 60,888
Cost in Excess of Net
Assets Acquired 41,724 15,374(b) 26,350
Other Assets 2,765 2,765
-------- -------- -------- -------
Total Assets 731,039 22,766 708,273
-------- -------- -------- -------
-------- -------- -------- -------
Current Liabilities:
Accounts Payable $383,548 $25,711(a) $357,837
Accrued Liabilities 37,543 952(a) 4,085(c) 40,676
Short-Term Debt
Long-Term Debt-Current 9,084 9,084
Subordinated Debt-Current 4,400 4,400
-------- -------- -------- -------
Total Current
Liabilities 434,575 26,663 4,085 411,997
Long-Term Debt 268,079 268,079
Subordinated Debt 13,200 13,200
other Long-term Debt 188 188(a)
--------- -------- -------- --------
Total Liabilities 716,042 26,851 4,085 693,276
--------- -------- -------- --------
Total Stockholders'
Equity 14,997 (4,085) (4,085) 14,997
Total Liabilities and
Stockholders Equity $731,039 $22,766 $708,273
-------- -------- --------- --------
-------- -------- --------- --------
</TABLE>
See accompanying notes to unaudited pro forma condensed
consolidated financial statements.
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<PAGE>
<TABLE>
PRO FORMA FINANCIAL INFORMATION
MERISEL, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1996
(In Thousands, Except Per Share Data)
<CAPTION>
Pro Forma
Adjustments
Historical
12/31/96 FAB (a) Other Pro Forma
<S> <C> <C> <C> <C>
Net Sales $5,522,824 $1,021,310 $4,501,514
Cost of Sales 5,233,570 984,515 4,249,055
---------- ---------- ---------- ----------
Gross Profit 289,254 36,795 252,459
Selling, General &
Administrative
Expenses 295,021 33,689 261,332
Impairment Loss 42,033 42,033
---------- ---------- ---------- ----------
Operating Loss (47,800) (38,927) (8,873)
Loss on Sale of
European, Mexican and
Latin American
Operations 33,455 33,455
Interest Expense 37,431 255 37,176
Other Expense 20,150 58 20,092
---------- ---------- ---------- ----------
Loss Before Income
Taxes (138,836) (39,240) (99,596)
Income Tax Provision (1,539) (60) (1,479)
---------- ---------- ---------- ----------
Net Loss $(140,375) $(39,300) $(101,075)
---------- ---------- ---------- -----------
---------- ---------- ---------- -----------
Net Loss Per Share $ (4.68) $ (3.37)
---------- ---------- ---------- -----------
---------- ---------- ---------- -----------
Weighted Average
Number of Shares
Outstanding 30,001 30,001
----------- ----------
----------- ----------
</TABLE>
See accompanying notes to unaudited pro forma condensed
consolidated financial statements.
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<PAGE>
<TABLE>
PRO FORMA FINANCIAL INFORMATION
MERISEL, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(In Thousands, Except Per Share Data)
<CAPTION>
Pro Forma
Adjustments
Historical
12/31/96 FAB (a) Other ProForma
<S> <C> <C> <C> <C>
Net Sales $5,956,967 $1,141,094 $ $4,815,873
Cost of Sales 5,633,278 1,097,673 4,535,605
---------- ---------- ---------- ----------
Gross Profit 323,689 43,421 280,268
Selling, General &
Administrative
Expenses 317,195 41,468 2,986(b) 278,713
Impairment Losses 51,383 30,000 21,383
Restructuring Charge 9,333 9,333
---------- ---------- ----------- ----------
Operating Loss (54,222) (28,047) (2,986) (29,161)
Interest Expense 37,583 4,210 33,373
Other Expense 13,885 137 13,748
---------- ---------- ---------- ----------
Loss Before Income
Taxes (105,690) (32,394) (2,986) (76,282)
Income Tax Benefit 21,779 903 20,876
---------- ---------- ---------- -----------
Net Loss $ (83,911) $ (31,491) $ (2,986) $ (55,406)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net Loss Per Share $ (2.82) $ (1.86)
---------- ----------
---------- ----------
Weighted Average Number
of Shares
Outstanding 29,806 29,806
----------- ----------
----------- ----------
</TABLE>
See accompanying notes to unaudited pro forma condensed
consolidated financial statements.
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<PAGE>
Notes to the Unaudited Pro Forma Condensed Consolidated Financial
Statements
1. General
The foregoing unaudited pro forma condensed consolidated
financial statements illustrate the effect of the sale by the
Company of substantially all the assets of Merisel FAB, Inc. to
ComputerLand Corporation ("ComputerLand"), a wholly owned
subsidiary of SYNNEX Information Technologies, Inc. ("Synnex")
pursuant to a Purchase Agreement (the "Purchase Agreement") among
the Company, Merisel FAB, Inc., ComputerLand, and Synnex.
Merisel FAB operates the Company's Franchise and
Aggregation Business ("FAB"). The sales price, if
computed at December, 31 1996, would have been $26,850,000
consisting of $6,850,000 of trade payable and accrued liabilites
and a $20,000,000 extended payable due to Vanstar Corporation.
As part of the sale, the Company agreed to extend rebates to
Synnex on future purchases at a defined rate per dollar of
purchases, not to exceed $2,000,000. The sales price is subject
to adjustments based upon the March 28, 1997 balance sheet.
Because the Company recorded an impairment charge of $2,033,000
in the quarter ended December 31, 1996 to adjust Merisel FAB's
assets to their fair value, the recognition of this sale as of
December 31, 1996 would not result in a loss as follows:
Purchase price 26,850,000
Book value of FAB Assets purchased (7,392,000)
Value of rebates to be paid to buyer (2,000,000)
Intangible assets associated with FAB
to be written off (15,374,000)
Estimated direct and other costs
associated with the transaction (2,084,000)
------------
Loss on Sale of FAB 0
------------
------------
2. Pro Forma Balance Sheet Adjustments
a)FAB - Represents the historical unaudited December 31, 1996
balances for Merisel FAB for those assets transferred to, and liabilities
assumed by ComputerLand.
b) Cost in excess of net asset acquired - Amounts relate to Merisel
FAB which will be written off as a result of the sale.
c) Accrued Liabilities - Represents adjustments to accrue
$2,000,000 of rebates extended to Synnex as part of the purchase
agreement, and $2,085,000 of direct costs associated with the sale of FAB.
3. Pro Forma Income Statement Adjustments for the Year Ended
December 31, 1996
a)FAB - Represents the historical unaudited December 31, 1996
balances for Merisel FAB which are eliminated to reflect the sale
of Merisel FAB.
4. Pro Forma Income Statement Adjustments for the Year Ended
December 31, 1995
a)FAB - Represents the historical unaudited December 31, 1995
balances for Merisel FAB which are eliminated to reflect the sale
of Merisel FAB.
b)Selling, General and Administrative Expenses. In 1995 certain
corporate costs were allocated by Merisel to Merisel FAB
(corporate overhead, administrative expenses, etc.). It is
likely that such costs would not have been eliminated due to the
sale of FAB, and are therefore added back for the purposes of
this pro forma presentation.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, hereto duly authorized.
MERISEL, INC.
Date: April 14, 1997 /S/ JAMES E. ILLSON
----------------------------
James E. Illson, Senior Vice
President Finance, and Chief Financial
Officer
(Duly authorized officer and
principal financial officer)
<PAGE>
For Immediate Release
Financial Media/Investor Relations:
Rivian Bell
(310) 615-6812
(310) 615-6868
(800) 686-1910 (24-hour pager)
Richard Bernhardt
Sr. Manager, Marketing Communications
ComputerLand Corporation
(510) 467-6097
[email protected]
Merisel Completes Sale of FAB Subsidiary
El Segundo, Calif. (March 31, 1997) -- Merisel, Inc.
(NASDAQ:MSEL) announced today that, as of March 28, 1997, the
company has completed the sale of substantially all of the
assets of its wholly owned subsidiary, Merisel FAB, Inc., to
ComputerLand Corporation, a wholly owned subsidiary of Synnex
Information Technologies, Inc., a Fremont, Calif.-based
distributor of microcomputers and communication, networking,
peripheral, and storage products. Merisel FAB, Inc. operated
the company's ComputerLand Franchise and Datago businesses.
Terms of the sale called for the buyer to acquire
substantially all of the assets and assume substantially all
of the liabilities of Merisel FAB, Inc. The liabilities
assumed by the buyer include an extended payable of
$20,000,000 due to Vanstar Corporation. In the quarter ended
Dec. 31, 1996, Merisel, Inc. recorded an impairment charge of
$2,033,000 to adjust Merisel FAB's assets to fair market
value.
Merisel, Inc. (NASDAQ:MSEL) is a leader in the distribution of
computer hardware, software and networking products. Merisel
distributes a full line of 25,000 products to more than 45,000
resellers throughout the U.S. and Canada.
Additional information can be obtained through the company's
World Wide Web site (http://www.merisel.com) or by requesting
information by fax at (310) 615-6811.
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