As filed with the Securities and Exchange Commission on January 15, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CHS ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 87-0435376
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
2153 N.W. 86TH AVENUE
MIAMI, FLORIDA 33122
(305) 716-8273
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
-----------------
CLAUDIO OSORIO
PRESIDENT
CHS ELECTRONICS, INC.
2153 N.W. 86TH AVENUE
MIAMI, FLORIDA 33122
(305) 716-8273
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPIES OF COMMUNICATIONS TO:
PAUL BERKOWITZ, ESQUIRE
GREENBERG, TRAURIG, HOFFMAN,
LIPOFF, ROSEN & QUENTEL, P.A.
1221 BRICKELL AVENUE
MIAMI, FLORIDA 33131
(305) 579-0500
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE
TO THE PUBLIC: From time to time after this
Registration Statement becomes effective.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title of Shares Amount to be Proposed Maximum Amount of
to be Registered Registered Aggregate Offering Price(1) Registration Fee
<S> <C> <C> <C>
Common Stock, $.001 par value 239,612 Shares $4,163,258.50 $1,261.60
<FN>
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(1) Estimated solely for the purpose of calculating the registration fee, and
pursuant to Rule 457(c), based on the average sales price for the Common
Stock reported by the Nasdaq National Market on January 13, 1997.
</FN>
</TABLE>
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PROSPECTUS
SUBJECT TO COMPLETION DATED JANUARY 15, 1997
239,612 SHARES
CHS ELECTRONICS, INC.
COMMON STOCK
---------------------
This Prospectus covers an aggregate of 239,612 shares (the "Shares") of
common stock, par value $.001 per share (the "Common Stock"), of CHS
Electronics, Inc., a Florida corporation (the "Company"), being sold by certain
shareholders of the Company (the "Selling Shareholders"). See "Selling
Shareholders." The Company will not receive any proceeds from the sale of shares
by the Selling Shareholders.
The Common Stock is listed on the Nasdaq National Market under the
symbol CHSE. On January 13, 1997, the average of the last reported bid and ask
price of the Common Stock as reported by Nasdaq was $17.375 per share.
The Company has been advised by the Selling Shareholders that they may
sell all or a portion of the shares offered hereby from time to time in the
over-the-counter market (or any exchange on which the Common Stock may then be
listed), in negotiated transactions, directly or through broker-dealers or
otherwise, that such shares will be sold at market prices prevailing at the time
of such sales or at negotiated prices. Such broker-dealers may receive
compensation in the form of underwriting discounts, concessions or commissions
from the Selling Shareholders and/or purchasers of the Shares for whom they may
act as agent (which compensation may be in excess of customary commissions). In
connection with such sales, the Selling Shareholders and any broker-dealers
participating in such sales may be deemed to be underwriters as that term is
defined under the Securities Act of 1933, as amended (the "Securities Act").
Neither the Company nor the Selling Shareholders can presently estimate the
amount of commissions or discounts, if any, that will be paid by the Selling
Shareholders on account of sales of Common Stock from time to time. In addition,
the Company has agreed to indemnify the Selling Shareholders against certain
liabilities, including liabilities under the Securities Act. See "Plan of
Distribution."
The Company will pay all the expenses, estimated to be approximately
$22,000, in connection with this offering, other than underwriting and brokerage
commissions, discounts, fees and counsel fees and expenses incurred by the
Selling Shareholders. The Shares are being registered at the request of the
Selling Shareholders.
See "Risk Factors" beginning on page 5 for a discussion of certain
factors that should be considered by prospective purchasers of the Shares
offered hereby.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COM-
MISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS JANUARY __, 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports and
other information filed by the Company can be inspected and copied at prescribed
rates at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at the following
Regional Offices of the Commission: 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York
10048 and through the Commission's Internet address at http://www.sec.gov.
Copies of this material can also be obtained at prescribed rates from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. Reports and other information concerning the Company can also be
inspected at the offices of Nasdaq Stock Market, 1735 K Street, N.W.,
Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on
Form S-3 (the "Registration Statement") under the Securities Act with respect to
the Shares offered hereby. This Prospectus, which is a part of the Registration
Statement, does not contain all the information set forth in, or annexed as
exhibits to, such Registration Statement, certain portions of which have been
omitted pursuant to rules and regulations of the Commission. For further
information with respect to the Company and the Shares, reference is made to the
Registration Statement, including the exhibits thereto. Copies of such
Registration Statement, including exhibits, may be obtained from the Public
Reference Section of the Commission at the aforementioned facilities of the
Commission, upon payment of the fee prescribed by the Commission. The summaries
contained in this Prospectus of additional information included in the
Registration Statement or any exhibit thereto are qualified in their entirety by
reference to such information or exhibit.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company under the Exchange Act
with the Commission are incorporated in and made a part of this Prospectus by
reference:
(i) the Company's Annual Report on Form 10-K for the year
ended December 31, 1995;
(ii) the Company's quarterly reports on Form 10-Q for the
fiscal quarters ended March 31, 1996, June 30, 1996
and September 30, 1996;
(iii) the Company's Current Report on Form 8-K dated
February 21, 1996 as amended by Form 8-K/A dated May
9, 1996;
(iv) the Company's Current Report on Form 8-K dated April
12, 1996;
(v) the Company's Current Report on Form 8-K dated
October 18, 1996 as amended by Form 8-K/A dated
December 17, 1996;
(vi) the Company's Schedule 14C dated February 21, 1996;
and
(vii) the Company's filing on Form 8-B dated March 15,
1996.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the
offering made hereby, shall be deemed to be incorporated by reference in this
Prospectus and to be part hereof from the date of filing of such documents.
Any information contained herein or in a document incorporated by
reference herein shall be deemed to be modified or replaced for purposes of this
Prospectus to the extent that information contained herein or in any other
subsequently filed document which also is incorporated by reference herein
modifies or replaces such information. Any such information so modified or
replaced shall not be deemed, except as so modified or replaced, to constitute a
part of this Prospectus.
The Company will provide, without charge, to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of such person, a copy of any or all of the information incorporated
herein by reference (other than exhibits to the information that is incorporated
by reference unless such exhibits are specifically incorporated by reference
into the information that this Prospectus incorporates). Written or telephone
requests for such copies should be directed to the Company's principal executive
offices: Attn: Secretary, 2153 N.W. 86th Avenue, Miami, Florida 33122, telephone
number (305) 716-8273.
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<PAGE>
THE COMPANY
GENERAL
CHS Electronics, Inc. ("CHS" or the "Company") is a leading
international distributor of microcomputer products, networking products and
software. CHS operates in 30 countries across three regions, including Western
Europe, Eastern Europe and South America and services an active customer base of
greater than 50,000 resellers. Most of the products sold by the Company are
manufactured by approximately 35 vendors including Hewlett-Packard, Seagate,
Microsoft, Novell, IBM, Acer, Creative Labs, 3Com, Canon, Epson and Intel. The
Company is a focused distributor, as opposed to a broadline distributor, and
seeks to represent leading vendors within specific product categories. CHS
believes that it is the fifth largest distributor of microcomputer products in
the world, and the largest distributor in South America and Eastern Europe. The
Company has no significant sales in the United States.
The large number and diversity of resellers make it cost efficient for
manufacturers to rely on wholesale distributors such as the Company to assume
responsibility for some portion of their distribution, credit, inventory,
marketing and support requirements. Similarly, due to the large number of
product manufacturers, resellers generally cannot efficiently establish direct
purchasing relationships with each manufacturer and instead rely on distributors
to satisfy their product, financing, marketing and technical support needs. The
Company believes the wholesale distribution industry is consolidating as access
to financial resources and economies of scale become more critical and as
certain manufacturers limit the number of authorized distributors of their
respective products.
According to International Data Corporation ("IDC"), in 1995 Western
Europe represented approximately 23% of the worldwide PC market. The Company's
pan-European presence strategically positions the Company to take advantage of
the consolidation trend in the distribution industry and increase its market
share in Western Europe. Additionally, the regions in which the Company operates
are relatively underpenetrated as compared to the United States. The penetration
rate, defined as number of personal computers per person, in Western Europe is
15.3% compared to a penetration rate of 35.8% in the United States. A
significant portion of the Company's sales are in the emerging markets of
Eastern Europe and South America, regions which the Company believes are
underserved relative to the entire industry and offer substantial growth
opportunities. IDC projects personal computer sales in Eastern Europe (including
the Middle East and Africa) will grow from $3.9 billion in 1995 to $7.6 billion
in 1999, representing a compound annual growth rate of 18.5%. IDC projects
personal computer sales in South America (including Mexico and Central America)
will grow from $3.5 billion in 1995 to $7.8 billion in 1999, representing a
compound annual growth rate of 22.2%. This compares favorably to a 9.6% compound
annual growth rate projected by IDC for personal computer sales in the United
States over the same period.
CHS operates under a decentralized structure which delegates to
managers familiar with the customs and needs of a particular country the
authority to make daily operational decisions including those necessary to
satisfy the particular demands of their market. As compared to certain
competitors which operate under a more centralized system, the Company believes
that its business model of focused distribution through locally managed full
service facilities integrating warehousing, purchasing, sales, credit and
accounting services provides competitive cost and operating advantages.
The Company's principal executive offices are located at 2153 N.W. 86th
Avenue, Miami, Florida 33122 and its telephone number is (305) 716-8273. Unless
the context otherwise requires, the term the "Company" as used in this
Prospectus refers to CHS Electronics, Inc. and its subsidiaries.
RECENT DEVELOPMENTS
On October 4, 1996, the Company completed the acquisition of the assets
and the assumption of the liabilities of the distribution businesses of Merisel,
Inc. in Austria, France, Germany, Great Britain, Switzerland and The
Netherlands, including Merisel's European Distribution Center. The Company also
acquired Merisel's export operations serving Latin America from Miami, Florida
and a distribution business in Mexico. The purchase price was approximately $154
million and was funded through cash of $36 million, factoring proceeds of $55
million and $63 million in asset securitization borrowings.
-3-
<PAGE>
On December 19, 1996, the Company announced that it had signed a
definitive agreement to acquire the operations of Frank & Walter Computer GmbH
(F&W), the fourth largest computer distributor in Germany, for 2.2 million
unregistered shares of Common Stock. The transaction combines the operations of
F&W, a privately held company based in Brunschwag, which is expected by the
Company to have 1996 sales of $750 million, with CHS Germany, which the Company
expects to have 1996 sales (including the sales on a pro forma basis of the
German operations recently acquired from Merisel, Inc.) of $650 million. Carsten
Frank, the founder of F&W, will also become a CHS executive vice president
responsible for Europe.
F&W has 10,000 active dealers and is one of the largest distributors of
Western Digital and Seagate products in the world. The company, which employs
about 400 and operates only within Germany, is focused on distribution to
smaller dealers in central Germany. CHS Germany, which employs 350 and has 8,000
active dealers in Germany, has focused on distribution to medium and large
resellers in the north and south of the country.
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<PAGE>
RISK FACTORS
AN INVESTMENT IN THE SHARES OFFERED HEREBY INVOLVES CERTAIN RISKS.
PROSPECTIVE PURCHASERS SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS, IN
ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, WHEN EVALUATING
THE COMPANY AND ITS BUSINESS BEFORE MAKING AN INVESTMENT DECISION. THIS
PROSPECTUS CONTAINS CERTAIN STATEMENTS OF A FORWARD-LOOKING NATURE RELATING TO
FUTURE EVENTS OR THE FUTURE FINANCIAL PERFORMANCE OF THE COMPANY. PROSPECTIVE
INVESTORS ARE CAUTIONED THAT SUCH STATEMENTS ARE ONLY PREDICTIONS AND THAT
ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY. IN EVALUATING SUCH STATEMENTS,
PROSPECTIVE INVESTORS SHOULD SPECIFICALLY CONSIDER THE VARIOUS FACTORS
IDENTIFIED IN THIS PROSPECTUS, INCLUDING THE MATTERS SET FORTH BELOW, WHICH
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH
FORWARD-LOOKING STATEMENTS.
MANAGEMENT OF GROWTH. The Company's significant growth and recent
acquisitions have placed, and are expected to continue to place, substantial
demands on the Company's managerial, operational, financial and other resources.
Further acquisitions will require the Company to continue to invest in its
operations, including its financial and management information systems, and to
retain, motivate and effectively manage its employees. There can be no assurance
that the management skills and systems currently in place will be adequate to
implement its strategy. This could have a material adverse effect on the
Company's business, financial condition and results of operations.
VARIABILITY OF CUSTOMER REQUIREMENTS; NATURE OF CUSTOMER COMMITMENTS ON
ORDERS. The level and timing of orders placed by the Company's customers vary
due to a number of factors, including customer attempts to manage inventory,
changes in customers' strategies and variations in demand for products. The
Company relies on its estimate of anticipated future volumes when making
commitments regarding the quantities and the mix of products that it intends to
carry in inventory. The Company does not have long term contracts with its
customers and a variety of conditions could cause customers to reduce their
orders. Any significant reduction in customer orders could adversely impact the
Company.
POTENTIAL QUARTERLY FLUCTUATIONS; SEASONALITY OF SALES. The Company may
experience variability in its net sales and net income on a quarterly basis as a
result of many factors, including the condition of the microcomputer industry in
general, shifts in demand for software and hardware products and industry
announcements of new products or upgrades. The Company's planned operating
expenditures are based on sales forecasts. If revenues do not meet expectations
in any given quarter, operating results may be materially adversely affected.
Sales in Europe in the first and fourth quarters of each year are typically
higher than in the second and third quarters. In South America, sales in the
third and fourth quarters of each year are typically higher than in the first
and second quarters.
ACQUISITIONS. The Company intends to pursue the acquisition of other
companies, assets or product lines that would complement or expand its existing
business. Acquisitions involve a number of risks that could adversely affect the
Company's operating results, including the diversion of management's attention,
the assimilation of the operations and personnel of the acquired companies, the
amortization of acquired intangible assets and the potential loss of key
employees of the acquired companies. There can be no assurance that the Company
will consummate future acquisitions on satisfactory terms, that adequate
financing will be available on terms acceptable to the Company, or that any
acquired operations will be successfully integrated.
DEPENDENCE ON KEY PERSONNEL. The Company is highly dependent upon its
ability to retain its current personnel and to continue to attract and retain
qualified personnel. The Company is particularly dependent on the services of
its President, Claudio Osorio. The Company does not possess any key-man life
insurance policies with respect to Mr. Osorio or any other officer of the
Company. There is intense competition for qualified personnel, and there can be
no assurance that the Company will be able to continue to attract and retain the
qualified personnel necessary for the development of its business. Loss of the
services of, or failure to recruit, key personnel could be detrimental to the
Company.
COMPETITION; DECLINING GROSS PROFIT MARGINS. The Company's business is
highly competitive. Certain of the Company's competitors have greater financial,
marketing, service and technical support resources than the Company. There can
be no assurance that the Company's resources will be sufficient to allow the
Company to compete effectively in the future. Continued increases in competition
could have a material adverse effect on the Company's results of operations
because of price reductions and potential loss of market share. Certain of the
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<PAGE>
Company's competitors may sell products at prices below that charged by the
Company. As a result of this price competition, the Company and its competitors
currently are experiencing downward pressure on gross margins, which the Company
expects to continue for the foreseeable future. The Company expects to offset
the impact of declines in its gross margin by reducing its operating expenses as
a percentage of net sales, although there can be no assurance of the success of
this strategy in future periods.
RISKS ASSOCIATED WITH INTERNATIONAL SALES. Substantially all of the
Company's sales are to customers outside of the United States. Changes in the
value of foreign currencies relative to the United States dollar could adversely
affect the Company's results of operations and financial position, and
transaction gains and losses could contribute to fluctuations in the Company's
results of operations. When possible, the Company engages in currency hedging
transactions and certain other practices to ameliorate these risks. There can be
no assurance that such efforts will materially reduce the effects of
fluctuations in foreign currency exchange rates on the Company's results of
operations.
The Company's existing and planned international operations are subject
to political and economic uncertainties, including among others, inflation,
hyperinflation, risk of renegotiation or modification of existing agreements or
arrangements with governmental authorities, transportation tariffs, export
controls, foreign exchange restrictions which limit the repatriation of
investments and earnings therefrom, changes in taxation, hostilities and
confiscation of property. Changes related to these matters could have a material
adverse effect on the Company's results of operations or financial condition.
LIMITATION ON DISTRIBUTIONS FROM SUBSIDIARIES. The Company derives all
of its operating income and cash flow from its subsidiaries and relies on
payments from, distributions from, and intercompany borrowings with, its
subsidiaries to generate the funds necessary to meet its obligations. In certain
countries, exchange controls may limit the ability of the Company's subsidiaries
to make payments to the Company which may limit the repatriation of investments
and earnings therefrom. Restrictions in financing or credit arrangements may
also limit such payments. Claims of creditors of the Company's subsidiaries will
generally have priority as to the assets and cash flow of such subsidiaries over
the claims of the Company or its shareholders.
EFFECTS OF TECHNOLOGICAL CHANGE. The products sold by the Company are
characterized by rapidly changing technology, frequent new product introductions
and evolving industry standards that can render the products marketed by the
Company obsolete or unmarketable in a relatively short period of time. The
Company's future success will depend upon its ability to limit its exposure to
obsolescence in its inventory and to gain access to the product lines of vendors
of new technology. Although the Company attempts to enter into stock rotation
agreements with its vendors permitting the return of inventory, there can be no
assurance that these efforts will be successful.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of
shares of Common Stock being offered by the Selling Shareholders hereunder.
Expenses expected to be incurred by the Company in connection with this offering
are estimated at approximately $22,000.
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<PAGE>
SELLING SHAREHOLDERS
All of the Shares offered hereby were acquired by the Selling
Shareholders in connection with the sale of their ownership interest in an
entity acquired by the Company from Comtrad, Inc., a shareholder of the Company.
The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock by the Selling Shareholders.
<TABLE>
<CAPTION>
NUMBER OF OWNERSHIP OF SHARES OF
NAME AND ADDRESS OF SHARES OWNED COMMON STOCK AFTER
SELLING SHAREHOLDER PRIOR TO OFFERING NUMBER OF SHARES OFFERING(1)
- ------------------------- ------------------------- --------------------------
SHARES PERCENTAGE OFFERED HEREBY SHARES PERCENTAGE
------ ---------- -------------- ------ ----------
<S> <C> <C> <C> <C> <C>
Garry Boon(2)(3) 147,059 1.2 73,530 73,529 *
Janette Bunn(4)(5) 29,412 * 29,412 -0- -0-
Salvatorre Cacioppo(5)(6) 98,039 * 29,400 68,639 *
Pierre Delphin(5)(7) 59,872 * 48,000 11,872 *
Howard Gunn(3)(8) 51,470 * 25,735 25,735 *
Jan Lawford(3)(9) 51,470 * 25,735 25,735 *
Patrice Laureau(5)(10) 39,216 * 7,800 31,416 *
<FN>
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* Less than 1%
(1) Assumes all Shares registered hereby are sold. Since the Selling
Shareholders may sell all, some or none of their Shares, no actual
estimate can be made of the aggregate number of Shares that are to be
offered hereby or the number or percentage of Shares that each Selling
Shareholders will own upon completion of the offering to which this
Prospectus relates.
(2) Mr. Boon is the managing director of the Company's subsidiary in the
United Kingdom and a regional director of the Company.
(3) The address for Messrs. Boon and Gunn and Ms. Lawford is c/o CHS
Electronics Plc, Copse Road, St. Johns, Woking, Surrey GU21 1ST, United
Kingdom.
(4) Ms. Bunn was the director of marketing for the Company's subsidiary in
France until December 31, 1996.
(5) The address for Ms. Bunn and Messrs. Cacioppo, Delphin and Laureau is
c/o CHS France, S.A., 11 Rue de Cambrai, Bat 028, F-75019, Paris,
France.
(6) Mr. Cacioppo is the general manager of the Company's subsidiary in
France and a regional director of the Company.
(7) Mr. Delphin was an employee of CHS until April 1996 and currently
serves as a consultant to CHS.
(8) Mr. Gunn is the finance director of the Company's subsidiary in the
United Kingdom.
(9) Ms. Lawford is the marketing director of the Company's subsidiary in
the United Kingdom.
(10) Mr. Laureau is the finance director and co-deputy director of the
Company's subsidiary in France
</FN>
</TABLE>
PLAN OF DISTRIBUTIONN
The Selling Shareholders have advised the Company that they may from
time to time sell all or part of the Shares in one or more transactions in the
over-the-counter market, on the Nasdaq National Market (or any exchange on which
the Common Stock may then be listed), in negotiated transactions, or a
combination of such methods of sale, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. The Selling Shareholders may effect such transactions by selling the
Shares to or through broker-dealers, and such broker-dealers may receive
compensation in the form of underwriting discounts,
-7-
<PAGE>
concessions or commissions from the Selling Shareholders and/or purchasers of
the Shares from whom they may act as agent (which compensation may be in excess
of customary commissions). In connection with such sales, the Selling
Shareholders and any broker-dealers or agents participating in such sales may be
deemed to be underwriters as that term is defined under the Securities Act.
Neither the Company nor the Selling Shareholders can presently estimate the
amount of commissions or discounts, if any, that will be paid by the Selling
Shareholders on account of his sale of Common Stock from time to time.
Under the securities laws of certain states, the Shares may be sold in
such states only through registered or licensed brokers or dealers. In addition,
in certain states the Shares may not be sold unless the Shares have been
registered or qualified for sale in such state or an exemption from registration
or qualification is available and is satisfied.
The Company will pay all of the expenses, estimated to be approximately
$22,000, incident to the registration, offer and sale of the Shares to the
public hereunder other than commissions, fees and discounts of underwriters,
brokers, dealers and agents and attorneys' fees of the Selling Shareholders. The
Company has agreed to indemnify the Selling Shareholders and any underwriters
against certain liabilities, including liabilities under the Securities Act. The
Selling Shareholders have also agreed to indemnify the Company, its directors,
officers, agents and representatives against certain liabilities, including
liabilities under the Securities Act. The Company will not receive any of the
proceeds from the sale of any of the Shares by the Selling Shareholders.
The Selling Shareholders have advised the Company that they will comply
with Rule 10b-6 promulgated under the Exchange Act in connection with all
resales of the Shares.
The Company has been advised by the Selling Shareholders that they have
not, as of January 13, 1997, entered into any arrangement with a broker-dealer
for the sale of the Shares through a block trade, special offering, exchange
distribution or secondary distribution of a purchase by a broker-dealer.
DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
The Company's Articles of Incorporation, as amended, authorize the
issuance of 100,000,000 shares of Common Stock, par value $.001 per share. As of
January 6, 1997, there were 12,397,384 shares of Common Stock issued and
outstanding together with options granted by the Company's Board of Directors to
purchase 1,570,091 shares of Common Stock. In addition, an indeterminate number
of shares may be issued to the sellers of businesses in Hungary and Russia which
were acquired by the Company.
Holders of Common Stock are entitled to receive such dividends as may
be declared by the Company's Board of Directors. Additionally, holders of Common
Stock are entitled to one vote for each share of Common Stock held of record
upon all matters presented for action by shareholders. Shares of Common Stock
have no preemptive or other rights to subscribe for additional shares. The Board
of Directors may, from time to time, declare, and the Company may pay, dividends
and other distributions with respect to its outstanding shares of Common Stock
in cash, property or its own shares of Common Stock which are legally available
therefor. Upon liquidation or dissolution of the Company, all such holders are
entitled to receive pro rata the assets of the Company available for
distribution to its shareholders.
The Common Stock has no preemptive rights and no subscription,
redemption or conversion privileges. The Common Stock does not have cumulative
voting rights, which means that the holders of a majority of the outstanding
shares of Common Stock voting for the election of directors can elect all
members of the Company's Board of Directors. A majority vote is also sufficient
for other actions that require the vote or concurrence of shareholders. All of
the outstanding shares of Common Stock are fully paid and non-assessable.
-8-
<PAGE>
The transfer agent for the Common Stock is Interwest Transfer Company,
Suite 100, 1981 East 4800 South, Salt Lake City, Utah 84117.
PREFERRED STOCK
The Company is authorized to issue preferred stock with such
designation, rights and preferences as may be determined from time to time by
the Board of Directors. Accordingly, the Board of Directors is empowered,
without shareholder approval, to issue preferred stock with dividend,
liquidation, conversion, voting or other rights which could adversely affect the
voting power or other rights of the holders of the Company's Common Stock and,
in certain instances, could adversely affect the market price of such stock. In
the event of issuance, the preferred stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the Company. The Company has no present intention to issue any shares
of its preferred stock.
The holders of Common and Preferred Stock vote as a single group on all
matters except the following, which require the affirmative vote of a majority
of the holders of Common Stock and a majority of the holders of Preferred Stock:
(a) any merger or consolidation of the Company with or into any other
corporation except in the case of a merger into the Company of a subsidiary of
the Company 90% or more of which is owned by the Company and which does not
require a vote of shareholders of either corporation pursuant to the laws of the
State of Florida; (b) any share exchange in which a corporation, person or
entity acquires the issued or outstanding shares of stock of the Company
pursuant to a vote of shareholders of the Company; (c) any sale, lease, exchange
or other transfer of all, or substantially all, of the assets of the Company to
any other corporation, person or entity; or (d) any amendment to the Articles of
Incorporation.
CERTAIN FLORIDA LEGISLATION
Florida has enacted legislation that may deter or frustrate takeovers
of Florida corporations. The Florida Control Share Act generally provides that
shares acquired in excess of certain specified thresholds will not possess any
voting rights unless such voting rights are approved by a majority vote of a
corporation's disinterested shareholders. The Florida Affiliated Transactions
Act generally requires supermajority approval by disinterested shareholders of
certain specified transactions between a public corporation and holders of more
than 10% of the outstanding voting shares of the corporation (or their
affiliates). Florida law and the Company's Articles of Incorporation also
authorize the Company to indemnify the Company's directors, officers, employees
and agents.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for
the Company by Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A.,
Miami, Florida.
EXPERTS
The financial statements of the Company and its subsidiaries as of
December 31, 1995 and 1994, and for each of the years in the three-year period
ended December 31, 1995, have been incorporated by reference in this prospectus
and registration statement from the Company's Annual Report on Form 10-K in
reliance upon the report of Grant Thornton LLP, independent public accountants,
which is incorporated herein by reference, and upon the authority of said firm
as experts in accounting and auditing.
-9-
<PAGE>
- --------------------------------------------------------------------------------
No dealer, salesperson or any other person has been authorized to give
any information or to make any representation not contained or incorporated by
reference in this Prospectus in connection with the offering made hereby, and
any information or representation not contained or incorporated herein must not
be relied upon as having been authorized by the Company. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to buy any
securities other than the Shares described in the cover page hereof, or an offer
to sell or a solicitation of an offer to buy the Shares offered hereby in any
jurisdiction where, or to any person to whom, it is unlawful to make such offer
or solicitation. Neither the delivery of this Prospectus nor any sales made
hereunder shall, under any circumstances, create any implication that there has
been no change in the affairs of the Company since the date hereof or that the
information contained herein is correct as of any time subsequent to its date.
TABLE OF CONTENTS
PAGE
----
AVAILABLE INFORMATION..................................2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE........2
THE COMPANY............................................3
RISK FACTORS...........................................5
USE OF PROCEEDS........................................6
SELLING SHAREHOLDERS...................................7
PLAN OF DISTRIBUTION...................................7
DESCRIPTION OF CAPITAL STOCK...........................8
LEGAL MATTERS..........................................9
EXPERTS .............................................. 9
239,612 SHARES
CHS ELECTRONICS, INC.
COMMON STOCK
--------------------------
PROSPECTUS
--------------------------
January __, 1997
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Company estimates that expenses in connection with the offering
described in this registration statement (other than underwriting and brokerage
discounts, commissions and fees and legal fees incurred by the Selling
Shareholders, if any, payable by such Selling Shareholders) will be as follows:
Securities and Exchange Commission registration fee.........$ 1,261.60
Legal fees and expenses..................................... 10,000
Accounting fees and expenses................................ 10,000
Miscellaneous............................................... 738.40
--------
Total..............................................$ 22,000
========
------------------
All amounts except the Securities and Exchange Commission registration
fee are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company has authority under Section 607.0850 of the Florida
Business Corporation Act to indemnify its directors and officers to the extent
provided for in such statute. The Company's Articles of Incorporation provide
that the Company shall have the power to indemnify and may insure its officers
and directors to the fullest extent not prohibited by law. The Company has
entered into an agreement with each of its directors and executive officers
wherein it has agreed to indemnify each of them to the fullest extent permitted
by law.
Due to the foregoing provisions, the Company's security holders may be
unable to recover monetary damages against directors for actions taken by them
which constitute negligence or gross negligence or which are in violation of
their fiduciary duties, although it may be possible to obtain injunctive or
other equitable relief with respect to such actions. If equitable remedies are
found not to be available for any particular case, security holders may not have
any effective remedy against the challenged conduct.
II-1
<PAGE>
ITEM 16. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
3.1 The Company's Articles of Incorporation (incorporated by reference
to Exhibit 3.1 of the Company's Registration Statement on Form S-1
(No.333-03864))
3.2 The Company's Bylaws (incorporated by reference to Exhibit 3.2 of
the Company's Registration Statement on Form S-1 (No. 333-03864))
5 Opinion of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A.
23.1 Consent of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A.
23.2 Consent of Grant Thornton LLP
24 Reference is made to the Signatures section of this Registration
Statement for the Power of Attorney contained therein
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Deerfield Beach, State of Florida on this 13th
day of January, 1997.
CHS ELECTRONICS, INC.
By: /s/ CLAUDIO OSORIO
--------------------------------
Claudio Osorio
President and Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Claudio Osorio and Craig Toll,
respectively, his true and lawful attorney-in-fact, each acting alone, with full
powers of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments, including any
post-effective amendments, to this Registration Statement, and to file the same,
with exhibits thereto, and other documents to be filed in connection therewith,
including any registration statement pursuant to Rule 462 under the Securities
Act, with the Securities and Exchange Commission, hereby ratifying and
confirming all that said attorney-in-fact or his substitute, acting alone, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ CLAUDIO OSORIO President and Director (principal January 13, 1997
- ---------------------------------------- executive officer)
Claudio Osorio
/s/ CRAIG TOLL
- --------------------------------------- Chief Financial Officer and January 13, 1997
Craig Toll Treasurer (principal financial and
accounting officer)
/s/ ALVIN PERLMAN
- --------------------------------------- Executive Vice President and January 13, 1997
Alvin Perlman Director
/s/ ANTONIO BOCCALANDRO Secretary and Director January 13, 1997
- ---------------------------------------
Antonio Boccalandro
/s/ OTTO GERLACH
- ----------------------------------------- Director January 13, 1997
Otto Gerlach
/s/ ZBYNEK KRAUS
- ----------------------------------------- Director January 13, 1997
Zbynek Kraus
/s/ DONALD WINSTEAD
- ----------------------------------------- Director January 13, 1997
Donald Winstead
</TABLE>
II-3
<PAGE>
EXHIBIT INDEX
NUMBER DESCRIPTION PAGE
- ------ ----------- ----
5 Opinion of Greenberg, Traurig, Hoffman , Lipoff, Rosen & Quentel, P.A.
23.1 Consent of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A.
(contained in Exhibit 5 herein)
23.2 Consent of Grant Thornton LLP
24.1 Power of Attorney (contained on signature page)
EXHIBIT 5
Paul Berkowitz
579-0685 January 15, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We have acted as special counsel to CHS Electronics, Inc., a Florida
corporation (the "Company"), in connection with the registration statement on
Form S-3 (the Registration Statement") being filed by the Company under the
Securities Act of 1933, as amended, with respect to 239,612 shares (the
"Shares") of the Company's common stock, par value $.001 per share, which may be
sold from time to time by certain shareholders (the "Selling Shareholders"). All
of the Shares offered by the Selling Shareholders are issued and outstanding.
In connection with the Registration Statement, we have examined,
considered and relied upon the following documents (collectively, the
"Documents"): the Registration Statement; the Company's Articles of
Incorporation, Bylaws and corporate minute book; a certificate of good standing
of the Company issued as of a recent date by the Secretary of State of the State
of Florida; and such matters of law and fact as we have considered necessary or
appropriate for the expression of the opinions contained herein.
In rendering the opinions set forth below, we have assumed without
investigation the genuineness of all signatures and the authenticity of all
documents submitted to us as originals, the conformity to authentic original
documents of all documents submitted to us as copies, and the veracity of the
Documents. As to questions of fact material to the opinions expressed herein, we
have relied upon the representations and warranties of the Company and the
Selling Shareholders made in the Documents.
Based solely upon and subject to the Documents, and subject to the
qualifications set forth below, we are of the opinion that the Shares have been
duly authorized and are validly issued, fully paid and non-assessable.
<PAGE>
Securities and Exchange Commission
January 15, 1997
Page 2
Although we have acted as special counsel to the Company in connection
with certain other matters, our engagement is limited to certain matters about
which we have been consulted. Consequently, there exist matters of a legal
nature involving the Company in which we have not been consulted and have not
represented the Company. This opinion letter is limited to the matters stated
herein and no opinions may be implied or inferred beyond the matters expressly
stated herein. The opinions expressed herein are given as of this date, and we
assume no obligation to update or supplement our opinions to reflect any facts
or circumstances that may come to our attention or any change in law that may
occur or become effective at a later date.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the prospectus contained in the Registration Statement.
Very truly yours,
GREENBERG, TRAURIG, HOFFMAN,
LIPOFF, ROSEN & QUENTEL, P.A.
By: /S/ PAUL BERKOWITZ
---------------------------
Paul Berkowitz
PB/ms
EXHIBIT 23.2
CONSENT OF GRANT THORNTON LLP
The Board of Directors
CHS Electronics, Inc.:
We have issued our report dated February 23, 1996, accompanying the consolidated
financial statements incorporated by reference or included in the Annual Report
of CHS Electronics, Inc. on Form 10-K for the year ended December 31, 1995. We
hereby consent to the incorporation by reference of said report in the
Registration Statement of CHS Electronics, Inc. on Form S-3 and to the use of
our name as it appears under the caption "Experts".
GRANT THORNTON LLP
Miami, Florida
January 14, 1997
