Creative Computers Signs Definitive Agreement To Acquire ComputAbility Inc.TORRANCE, Calif.--(BUSINESS WIRE)--Aug. 26, 1997-- Acquisition Will Increase Creative's Reach Into PC/Wintel Market Creative Computers Inc. (Creative) (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :MALL) Tuesday announced that it has signed a definitive agreement to acquire the assets of Milwaukee-based ComputAbility Inc., a privately held market reseller of PC/Wintel peripheral and software products, for $8 million, $5.5 million in cash and the remainder in shares of Creative common stock. The acquisition of ComputAbility, which recorded 1996 revenues in excess of $50 million, is targeted to increase Creative's reach into the PC/Wintel market. The acquisition is expected to close in the next few weeks. ComputAbility, which will operate as a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Creative, will retain its name and management team. "We have stated that our primary goal is to increase PC/Wintel sales and this acquisition represents a major step toward that goal," stated Frank Khulusi, Creative's president and chief executive officer. "The synergies of this acquisition are expected to be significant. "We plan to expand our reach into the PC/Wintel market through ComputAbility's proprietary database, which is believed to have very little duplication with the names on Creative's proprietary database. We also see an opportunity to significantly increase ComputAbility's sales by broadening its product offerings to include hardware products already authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: for sale by Creative. "ComputAbility is profitable, with strong operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: . Creative's balance sheet is expected to remain strong and the combined company is expected to have minimal debt on the date of the acquisition," added Khulusi. "Our plan is to support ComputAbility's growth in the PC/Wintel market, while enhancing shareholder value. "We expect to work closely with ComputAbility's capable, experienced management team and warmly welcome ComputAbility's entire staff to the Creative family," stated Khulusi. "ComputAbility will continue to operate under its own name to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. its strong identity and customer base of individuals and businesses it serves." Marcia Rose Marcia Rose is an Actress. Selected filmography
"We also expect to benefit from Creative's management expertise and substantial financial resources which will assist in increasing our market position." Founded in 1982 by Marcia Rose and Gary Rose, ComputAbility specialized in 8-bit computer hardware and software for Atari and Commodore One of the first personal computer companies. In 1977, Commodore Business Machines, West Chester, PA, introduced the PET computer and launched the personal computer industry along with Apple and Radio Shack. In 1982, it introduced the Commodore 64 (64K RAM) and later the Commodore 128. . ComputAbility refocused as the market changed, moving into the PC peripheral, software and high-end consumer electronics marketplace, while continuing to grow its customer base through a strategic marketing and customer focused implementation. Creative Computers is a leading direct marketer for users of personal computers. The company offers more than 45,000 products to its customers. The company creates demand for its products through its distinctive, full-color MacMall, PC Mall and DataCom Mall catalogs, outbound telemarketing telemarketing, the practice of selling goods or services to customers by means of the telephone or of surveying consumer preferences in telephone conversations. , Internet marketing See Internet advertising. and its Web site, four retail showrooms and other promotional materials. The company's staff of more than 300 knowledgeable telemarketing, customer service and technical support personnel work together to provide high-level customer service and gain customer loyalty. Customers may call PC Mall sales at 800/555-MALL, DataCom Mall sales at 800/898-DATA and MacMall sales at 800/222-2808 or shop Creative on the Internet at http://www.pcmall.com, http://www.datacommall.com or http://www.macmall.com . -0- Except for historical information, all of the statements, expectations and assumptions contained in the foregoing are forward- looking statements. The realization of any or all of these expectations is subject to a number of risks and uncertainties, and it is possible that the assumptions made by management may not materialize. There can be no assurance that the acquisition will be consummated or that, if consummated, the company will be able to receive expected benefits from the acquisition or that the company will not experience difficulties integrating the two companies. In addition to the factors set forth above, other important factors that could cause actual results to differ materially from expectations include competition from other catalog and retail store resellers and price pressures related thereto; reliance on Apple Computer, IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , Hewlett Packard, Compaq and other vendors; and risks due to shifts in market demand and/or price erosion of owned inventory. This list of risk factors is not intended to be exhaustive. Reference should also be made to the risk factors set forth from time to time in the company's Securities and Exchange Commission reports, including, but not limited to, those set forth in the section titled "Certain Factors Affecting Future Results" in its Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for 1996. CONTACT: Creative Computers Inc., Torrance Frank Khulusi/Richard M. Finkbeiner, 310/787-4500 or Seiler Martin Ekman LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. Tom Ekman/Jody Martin/Steven Seiler, 310/312-7880 |
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