CHS gets shot of subsidiaries
Local management take control under new company
CHS Electronics has shed more of its European, US and Latin American subsidiaries. The European deal, which excludes CHS Germany, CHS Austria and Frank & Walter, will give back control of operations to a group of senior managers in Europe under the company name "Newco". The transaction, announced on Tuesday, is believed to be worth around $300 million. Under the terms of the agreement, CHS will get $11 million cash, or will escape paying back the same amount of debt. Claudio Osorio, CHS chairman and CEO, said the deal would eliminate almost all of the company's long term debt. He added that CHS would be starting a new company called CHS.com to ship product online in Europe from its core distribution centre in The Netherlands. It also said it would continue The PC Way, its PC assembly joint venture with Trigem Computer. Mark Keough, CHS COO and leader of the MBO, was optimistic: "With the capital issues resolved, we look forward to refocusing our efforts of customers and suppliers. "We expect the new company to be among the top three distributors in Europe," he said Tuesday. The next day CHS revealed it had also completed the sale of certain Latin American subsidiaries. Start-up company DistributionTech.com, led by former CHS management, agreed to pay $23.5 million for the companies, as well as taking on debts from other CHS Latin American subsidiaries. CHS will have a 49 per cent stake in DistributionTech.com. The buy out was headed by Gonzalo DeVelasco, ex-MD of CHS Mexico, and Ray Bautista, former CFO of CHS Latin America. The subsidiaries included in the new company are in Mexico, Brazil, Columbia, Uruguay and Miami. ® Related stories: CHS quizzed over money laundering claims CHS losses revealed in full
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