Court OKs $14M Systemax Bid For Circuit City Name
By Alan Wolf -- TWICE, 5/13/2009
Richmond, Va. — A federal bankruptcy court here has approved a $14 million bid by Systemax to acquire Circuit City’s brands, trademarks and e-commerce business.
The sale was given the green light by U.S. Bankruptcy Court Judge Kevin R. Huennekens earlier this afternoon, according to the Richmond Times-Dispatch.
Systemax, a Port Washington, N.Y.-based manufacturer and marketer, had initially offered Circuit City $6.5 million and a percentage of sales for 30 months. An auction for the properties was held on Monday in New York.
Other bidders reportedly included Ultimate Electronics, the Colorado A/V chain owned by investor Mark Wattles. Wattles’ agitation as a major Circuit City shareholder led to a shakeup of the company’s board and management, neither of which could prevent its eventual bankruptcy and liquidation.
Circuit City bankruptcy attorney Gregg Galardi said in court today that Ultimate’s bid was not high enough to be considered for the auction, the Times-Dispatch reported.
Systemax had said the purchase “would further extend its position as a leader in online retailing of value-priced, branded consumer electronics.” The company previously hired 13-year Circuit City veteran Enas Raynor as a business development VP, citing her experience as territory business manager of Circuit’s The City concept stores.
Systemax similarly acquired the brand, trademarks and e-commerce business of CompUSA in January 2008. That deal, which fetched about $30 million, also included some 16 former CompUSA storefronts.
Systemax also sells its eponymous computers and Ultra-brand accessories through its TigerDirect stores, catalog and Web site. The company yesterday reported a 52 percent decline in first-quarter net income to $8.7 million.
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