The outfit has filed a lawsuit counterclaim April 11 alleging that En Pointe materially overstated the profitability of its business and that breaches by an En Pointe subsidiary have damaged PCM’s goodwill with many customers. PCM said the total damages exceed $57 million, or more than triple the company 2016 net income.
PCM paid $15 million upfront for En Pointe’s IT solutions business as well as 22.5 percent of future adjusted gross profit and 10 percent of certain service revenue for the next three years.
The first signs of trouble came in December 2016, when an En Pointe subsidiary filed a lawsuit against PCM in Delaware Superior Court for underpaying its agreed-upon earn-out payments.
Now three law firms have announced investigations into whether PCM violated federal securities laws by issuing materially misleading business information to investors.
When PCM filed its counterclaims the followed month, it alleged that the En Pointe subsidiary improperly used vendor rebates and marketing-related vendor credits attributable to prior accounting periods to understate the cost of the goods it was selling. PCM said it believes En Pointe’s earnings were millions of dollars less than they reported.
PCM also alleged that En Pointe misled the company with assurances that certain customer relationships were not dependent on En Pointe’s minority-owned status. But after closing, PCM said it discovered several acquired customers were unwilling to transfer their business to PCM since it is not certified as being minority-owned.