Micro D Chief Plans to Sell Her 51% Stake
In what represents a change in control of Micro D Inc. of Santa Ana, Lorraine Mecca, the company’s founder and former chief executive, has agreed to sell her 51% stake in the computer-equipment company to a Nashville-based firm.
Mecca, who resigned her post in July after the scuttling of a merger that would have created the nation’s largest wholesaler of computer products, reached a private agreement with the Ingram Distribution Group Inc., which supplies trade books, audio and video tapes, textbooks and microcomputer software.
The deal is expected to close Jan. 2.
Mecca could not be reached for comment Monday, but Linwood Lacy, Micro D’s chairman and chief executive, said that because Mecca’s 3.3 million shares of stock are restricted under federal law, she will probably receive less than their current market value.
Under Securities and Exchange Commission rules designed to prevent disruption of the stock markets, company insiders may not sell large blocks of stock on the open market, Lacy said. However, no such restrictions exist on private transactions, provided the purchaser agrees to hold the stock for at least two years, he said.
At Monday’s closing price of $3.25 a share, Mecca’s stake in Micro D is worth approximately $10.9 million.
According to Micro D officials, Ingram, which is privately held, will review the company’s operations and outlook before deciding whether to increase its stake in Micro D.
However, said Lacy, Ingram’s plans for Micro D, which posted a net loss of $1.3 million on revenues of $75 million during the nine months ended Sept. 30, are still unknown.
“This is a business that they are quite familiar with,” Lacy said. “I can’t speculate about what they might do, but obviously they wouldn’t spend this kind of money if they didn’t have plans for the company.”
Mecca had been looking for a way to get out of the day-to-day operations of the company she and her husband, Geza Csige, founded six years ago. Before the $16-million merger with First Software Inc. of Massachusetts fell through in July, she said she hoped the other company’s management team would assume daily operations, permitting her to leave Micro D.
