Tweeter Home Entertainment Group accepted a bid from Schultze Asset Management for the sale of the bankrupt electronics retailer’s assets. The offer was for $38 million in cash and the assumption of debt.
Tweeter Home Entertainment Group Inc. accepted a bid from Schultze Asset Management LLC for the sale of the electronics retailer’s assets. The offer was for $38 million in cash and the assumption of significant liabilities, including $8 million in additional costs and a credit line of $10 million.
Schultze is a hedge fund asset management company that specializes in bankrupt company turnarounds.
Tweeter, which operates Tweeter.com, is No. 242 in the Internet Retailer Top 500 Guide. The company filed for Chapter 11 bankruptcy protection in early June. Bids for the company’s assets were evaluated at an auction last week. The process was supervised and approved by the U.S. Bankruptcy Court in Wilmington, Del.
Schultze’s bid included the purchase of Tweeter’s 18.75% interest in Tivoli Audio LLC, an audio components manufacturer.
Tweeter sells online and in a network of 153 stores in various New England, Mid-Atlantic, Midwestern and Western states. The company posted a net loss of $35.2 million on revenue of $163.2 million in the second quarter vs. a net loss of $34.3 million on sales of $186.8 million in the prior year.
Tweeter expected to continue normal operations following the sale. The company will continue targeting mid-tier to high-end customers with full-service consumer electronics expertise, the company says.
“Both Tweeter and Schultze are very excited about this pending acquisition and are committed to emerging from this restructuring process as a stronger, more competitive organization focused on delivering an outstanding service experience to our customers,” says Tweeter president and CEO Joe McGuire. “The conclusion of this auction represents a very positive outcome for our employees, customers and business partners”