Misco flogged to Hilco

SystemaxGreatAmericanSystemax has offloaded almost all of its Misco-branded European reseller operations to Hilco Capital.

In a statement the company said it had “executed a definitive agreement with a management team backed by Hilco Capital Limited (“Hilco”) to sell all of its unprofitable European Technology Products Group businesses”.

Misco trades in the UK, the Netherlands, Italy, Spain and Sweden. Its French operations, which are doing OK, were not included.

It is still a rumour because a formal announcement of the deal is imminent. Debt restructuring is thought to be involved in the financial make-up of the deal.

Hilco Capital bought music retailer HMV from administration in 2013, and stationery chain Staples.

Misco was a telesales-based IT reseller working for a low margin, high volume market.  However management was too slow to see that sort of operation had the shelf life of mayfly spit. It tried to move to services, but it was too tricky.

Systemax, which owns Misco, has also struggled. It had to close stores in North America, shutter its PC production line and selling the technology reseller subsidiary NATG on to PCM at a loss.

In 2016, the Misco businesses, excluding France, turned over $542.7 million compared to $670.2 million in the prior year. Operating losses, including France, were $1.9 million, versus $2.6 million in 2015.

CEO Larry Reinhold said: “Our France business, which was our largest operation in Europe, is highly successful and has historically operated largely autonomously from our other European operations. It is a well-managed and valuable asset with leading market share, double digit revenue growth and strong bottom-line performance. We believe that we have found a good home for our former colleagues in Europe.

“We thank them for their efforts and wish them the best of luck in their future endeavours.”

The businesses were sold on a cash-free, debt-free basis. Systemax said it would provide transition services to Hilco for a “limited period of time”.