CANTON, MASS. -Tweeter Home Entertainment Group has reached an agreement in principle to buy Big Screen City, a four-store CE specialty chain with locations in San Diego and Temecula, Calif., for $5 million in cash and stock.
The 20-year-old A/V operation, founded by Bob Souter, enjoys annual sales of just under $16 million.
This latest acquisition, which is expected to close in May, will bolster Tweeter's position in the San Diego market, which it first entered two years ago with the purchase of DOW Stereo/Video. Tweeter was also attracted to Big Screen's high-margin sales mix, 66 percent of which is comprised of TV products. Of that, 57 percent consists of projection TVs, while 80 percent of the projection sets are either HD or HD-ready.
In addition, noted Tweeter president/CEO Jeff Stone, "A growing percentage of their business requires home installation services as they have paid particular attention to the sale of custom furniture and home theater products."
Stone added that the Big Screen stores would be renamed Tweeter in May and that Souter will stay on through year's end to assist with the merger.
According to Tweeter chief financial officer Joe McGuire, the acquisition will bring Tweeter's national store count to 100. He said that an additional 17 units will be opened by the end of fiscal 2001, representing a storefront growth rate of about 30 percent.