New MW Header

March 27, 2017
martin wolf Transaction Analysis
Systemax Closes Sale of Certain European Technology Products Group Units to Hilco

Financial Information
  • Enterprise Value                          Not Disclosed
Transaction Facts
  • Systemax (NYSE: SYX) announced today that it had, on Friday, closed the sale of its European Technology Products Group units, excluding those in France, to Hilco Capital Limited. The businesses were sold on a cash-free, debt-free basis.
  • The transaction would allow Systemax to concentrate on its two main profitable businesses: its North American maintenance, repair and operation ("MRO") business, the Industrial Products Group; and its France technology VAR business. Together the two businesses generated revenues of $1.1 billion and an operating income of more than $38 million in 2016.
  • Primarily operating in the UK, Hilco Capital is a private equity firm that specializes in restructuring and refinancing other companies. It reached an agreement to acquire the UK division of Staples (NASDAQ:SPLS) in November 2016. 
  • Systemax shares were up 37% today. 
Focusing on Profitable Divisions to Drive Growth 
 

  • New CEO, Clear Vision: This deal is the latest development in CEO Larry Reinhold's strategy of maximizing profitability by focusing on the company's most valuable and growing assets. 
  • Cutting Ties at the Right Time: Systemax has employed similar exit strategies before. In December 2015, Systemax sold certain B2B assets of its North American Technology Group, including the TigerDirect brand, to PCM, Inc. (NASDAQ: PCMI) (martinwolf advised Systemax in the transaction). In August 2016, the company sold its German Operations to Cancom SE, citing a challenging market. 
  • Transitioning into a Streamlined Brand: While Systemax is retaining a small residual equity position in the units, the transaction would allow for an immediate transition. The company has stated its desire to position itself into a well-managed corporate structure with the goal of maximizing revenue growth and delivering stronger performance.  
  • Services in the Spotlight:  Systemax operates as a direct marketer of brand name and private label products, organized under its Technology Products and Industrial Products segments. As a result, it faces competition from both large diversified MRO distributors such as Grainger Inc., MSC Industrial Direct Inc., and Fastenal Inc. and e-commerce giants like Amazon.
For more information about this transaction ,  click here  to read the press release.

martinwolf was not the advisor in this transaction.

To receive instant analysis on the day's business news from the martinwolf team,  follow us on Twitter @martin_wolf_ and on LinkedIn at martinwolf.

About martinwolf    


With offices in New York and the San Francisco Bay Area, martinwolf is a leading M&A Advisory focused on middle market companies in the IT Services, IT Supply Chain, IT-Enabled Business Process Outsourcing and Software as a Service (SaaS) space. Since 1997, our team has completed more than 150 transactions in over 20 countries and sold seven divisions of Fortune 500 companies. 

 

martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com.  

 

To learn more about martinwolf, contact Matthew Putzulu at [email protected].

 

© martinwolf 2017
      View our profile on LinkedIn   Follow us on Twitter


Quick Links

martinwolf.Com

 

Our LinkedIn

 

 

 
__________  
 
"The competitor to be feared is one who never bothers about you at all, but goes on making his own business better all the time."

Henry Ford
_________