JWP Completes Purchase of Failing Businessland Chain
JWP Inc., an engineering and consulting company, said Monday that it has completed its acquisition of troubled computer retailer Businessland Inc.
JWP said it paid about $43 million in a tender offer for up to 17 million shares of Businessland common stock and for its outstanding convertible bonds.
Businessland, once a high-flying chain of retail stores, had threatened to file for bankruptcy protection in recent months as its losses mounted.
The San Jose, Calif.-based retailer has closed most of its outlets, laid off hundreds of workers and tried to reposition itself as a distributor of personal computers to corporate users.
JWP will combine the operations of Businessland with those of its Computer Systems Group, based outside Boston. It said the new group will be the world’s largest computer retailer.
Analysts said that JWP will likely move quickly to merge operations with Businessland, and will draw about half its revenues from computer retailing as a result of the move.
“I expect this to be a real driver to earnings growth,” said David Loeb at Oppenheimer & Co. “I’m pretty confident they can cut costs pretty quickly and dramatically.”
The Purchase, N.Y.-based JWP said its tender offer was oversubscribed, with about 24.4 million shares of common stock and $172,000 in debentures tendered as of midnight Aug. 2, the expiration date for the offer.
JWP said it had accepted for payment on a pro-rata basis 17 million of the shares tendered at a price of $1 a share in cash and payment of $172,000 principal amount of debentures tendered at a price of $350 per $1,000.
The merged company, to be named JWP Businessland and based in Canton, Mass., will be the largest company-owned reseller and systems integrator of personal computer products.
JWP said it expects to cut its staff 10% to 20% by the first quarter of 1992. JWP’s Computer Systems Group and Businessland together have about 3,500 employees.
JWP, with 22,000 employees, operates 170 offices in North America, Europe, the Middle East, Africa and the Far East.
The merged company will have a global presence, with offices in Canada, Britain, Germany and Japan.
Shares of JWP closed 37.5 cents higher, at $17.50, on the New York Stock Exchange.