Brick-and-mortar retailer Fry's Electronics plans to acquire ailing online computer and peripherals e-tailer Cyberian Outpost Inc. for $0.25 per share in cash, according to a recent statement.
The acquisition plan will go into place once Cyberian Outpost's failed merger agreement with fellow e-tailer PC Connection Inc. is officially terminated. That should happen today, once Cyberian Outpost's repayment of loans to PC Connection is successfully completed.
The boards of both Cyberian Outpost and Fry's have already unanimously approved the transaction. They expect it to close in the fourth quarter of 2001. The acquisition is subject to the approval of Cyberian Outpost's stockholder and to other closing conditions. Fry's also plans to lend Cyberian Outpost up to US$13 million to help settle outstanding debts, including the PC Connection loans, and to provide the struggling e-tailer with working capital.
"We are excited about this opportunity to combine our resources with Fry's Electronics and are looking forward to a long-lasting, successful relationship," said Cyberian Outpost president and CEO Darryl Peck. Peck will continue with Cyberian following the acquisition.
Fry's Electronics, Inc. sports more than a dozen and a half locations throughout California, Texas, Arizona and Oregon. The company's retail locations have been developed to appeal to the "hi-tech professional," according to Fry's, and features more than 50,000 electronics in each location.
Cyberian Outpost claims more than 1.4 million customers worldwide, and reported net revenue of $355 million for the fiscal year ending February 28, 2001. Under the terms of its agreement with Fry's, the company will continue to operate under its own brand from its current facilities in Kent, CT.
This story, "Fry's to acquire e-tailer Outpost" was originally published by PCWorld.