Majority Holder Seeks Rest of Micro D
A Nashville firm that owns 59% of Micro D, the nation’s leading wholesaler of microcomputer products, on Wednesday offered to pay $37 million for the rest of the Santa Ana company.
Ingram Industries offered to pay $12.50 a share in cash to acquire the 41% of Micro D’s 7.2 million shares outstanding that it doesn’t already own. Ingram asked Micro D’s board to respond to the offer by Dec. 19.
Micro D officials estimate that the company has 15% of U.S. wholesalers’ $3.7-billion market for microcomputer products, up from 8% three years ago. Micro D had sales of $352.5 million in 1987, and industry analysts expect the firm’s sales to top $525 million this year.
Ingram has owned a controlling interest in the fast-growing company since 1986, when it bought the stock of Micro D founder Lorraine Mecca, who left the company that year. Ingram is a privately held holding company with interests in inland marine transportation and is a distributor of books, magazines and videotapes.
The company also is a major distributor of microcomputer products, with estimated annual sales exceeding $200 million. A merger of Ingram’s computer distribution business with Micro D’s would give the combined firm more than 20% of the wholesale market.
Ingram has been frustrated with the fact that it owned a large share of Micro D but did not have more say over the company’s affairs. Ingram Industries has placed only three directors on Micro D’s seven-member board.
Micro D Chairman Linwood A. Lacy Jr. has resisted Ingram’s attempts to gain more control over the company’s affairs on the grounds that Ingram also owned a competing microcomputer distribution firm.
“We believe that our merger proposal is an attractive and fair one for Micro D shareholders,” said E. Bronson Ingram, president of Ingram Industries. “Upon consummation of the merger, we expect the operations of Micro D will continue at their present locations.”
Lacy said the Ingram offer would be considered by a special committee composed of independent directors of the Micro D board, with the assistance of independent investment and legal advisers. Lacy said the proposed price will be the subject of “careful scrutiny by the special committee.”
Micro D’s stock closed unchanged at $10.50 per share Wednesday on the over-the-counter market. Ingram announced its offer after the market’s close.