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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.

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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 mputzulu@martinwolf.com.

 

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