Platinum Acquiring 2 More Firms
Los Angeles-based buyout specialist Platinum Equity is continuing its acquisition spree. The company said Friday that it would acquire Dallas-based CompuCom Systems Inc., which helps companies run their computer systems, for $254 million, and German dye maker DyStar for an undisclosed amount. The acquisitions would significantly expand Platinum’s global stable of businesses in technology and other sectors.
Platinum, headquartered in Century City, buys controlling stakes in companies or business units with the aim of operating them more profitably. In some cases, the units are eventually sold or merged into other Platinum operations.
The CompuCom Systems deal must be approved by CompuCom’s shareholders, and the DyStar deal requires approval from European regulators. If added to the Platinum stable, the two units would boost the parent company’s annual revenue to about $8 billion, from $5.5 billion, Platinum said, and expand its employee base to 39,000 from 32,000.
Platinum recorded $4 billion in 2003 revenue to rank as the 34th-largest private company in the U.S., according to Forbes magazine. It finalized its latest acquisition, of London’s Hays Logistics, in February, adding about $1.5 billion in sales.
“It’s been a good year,” said Tom Gores, Platinum’s chairman and chief executive. “Both CompuCom and DyStar are in great markets with additional opportunities.”
Gores said both companies “got a little paralyzed” in recent years for different reasons: CompuCom because of the burdens of being a publicly traded company and DyStar because it is owned almost equally by three European firms -- BASF, Bayer and the Aventis subsidiary Hoechst.
CompuCom’s first-quarter sales of $300 million were down 9% from a year earlier, and its net income dipped to 3 cents a share from 6 cents.
CompuCom, which has about 3,000 employees and sales of about $1 billion in 2003, is 58% owned by Wayne, Pa.-based Safeguard Scientifics Inc., which has agreed to vote its shares in support of the deal -- subject to the approval of its own shareholders.
If the acquisition is completed, holders of CompuCom’s common stock would get $4.60 a share and Safeguard Scientifics would get an additional $15 million for all of CompuCom’s preferred shares, which it owns.
In Friday’s trading on Nasdaq after the agreement was announced, CompuCom shares fell 35 cents to $4.49.
Whereas CompuCom would add to Platinum’s roster of tech companies, DyStar would fit a less typical niche for the firm.
DyStar, which has about 4,000 employees and generated revenue of about $1 billion in 2003, is the world’s leading supplier of dyes to the textile industry. Customers include clothing makers such as Nike Inc.
Gores said DyStar had an opportunity to grow in part by acquiring smaller players in the dye business and consolidating operations.
Platinum said it expected both deals to be completed in the third quarter.
