Cyberian Outpost Inc., whose deal to be acquired by PC Connection Inc. fell through last week, will instead be acquired by Sunnyvale, CA-based Fry's Electronics Inc. Fry’s is on an acquisition binge. Less than three weeks ago Fry’s agreed to acquire Egghead.com.
Fry’s will pay 25 cents a share for the 31.7 million shares outstanding and has agreed to loan Kent, CT-based Cyberian Outpost up to $13 million to repay a PC Connection loan, pay off Cyberian Outpost's secured debt and provide funds for working capital. The loan will be secured by all of Cyberian Outpost's assets.
Cyberian Outpost went public in July 1998 at about $25 a share. The stock peaked in December 1998 at $40 a share. As recently as October, it was selling at $5 a share.
The agreement will become effective upon the termination of Cyberian Outpost's existing merger agreement with PC Connection, Inc., which Cyberian Outpost expects to occur when PC Connection is repaid loans it previously made to Cyberian Outpost. Cyberian Outpost expects to repay those loans today.
The boards of Cyberian Outpost and Fry's have unanimously approved the transaction and expect it to close in the fourth quarter.
Fry's is a privately held retailer of electronics supplies for the high-tech professionals. It operates 12 stores in California, four in Texas, two in Arizona, and one in Oregon.
Cyberian Outpost reported net revenue of $355 million for the fiscal year ended February 28. The company will continue to operate under its own brand from its current facilities. President Darryl Peck will remain with the company after the acquisition.
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