$30-Million Acquisition of Leo’s Moves to Final Stage

An Encino-based investment company reported Monday that it signed a definitive agreement to acquire the Leo’s Stereo stores, one of Southern California’s largest consumer electronics chains, for more than $30 million.

Discovery Associates, which disclosed in May that it had reached a preliminary agreement to buy Leo’s, reported that it expects to complete the acquisition by Sept. 30. Discovery President Stephen Berglas said financing is being arranged through bank loans and private sources. PaineWebber, a New York brokerage, is assisting Discovery in obtaining financing, Berglas said.

Berglas said Discovery plans no immediate changes in Leo’s operations.

Leo’s Stereo, based in Carson, is owned by brothers Leo and Simon David, and has about 725 employees. Berglas said the two owners plan to stay with the company.

The chain owns 45 stores that sell audio and video equipment, most of them in Southern California. In the fiscal year ended Sept. 30, 1985, it had revenue of $93 million.

In buying Leo’s, publicly held Discovery is making its first acquisition since it was founded in August, 1984, by Berglas, its only employee, and Harvey Bibicoff, Discovery’s chairman.

Bibicoff owns the financial public relations firm of Bibicoff, Brown Associates in Encino. Berglas, an accountant, is the former chief financial officer of Jackpot Enterprises, a Las Vegas slot machine company.