Skip to main content

Caxton-Iseman Capital to Acquire Electrograph

  • Manchester Technologies, Inc. (Nasdaq: MANC) and Caxton-Iseman Capital, Inc. today announced a definitive agreement under which investment vehicles associated with Caxton-Iseman will acquire Manchester and its wholly-owned subsidiary, Electrograph Systems, Inc., in a cash transaction valued at approximately $56 million, net of Caxton-Iseman Capitals fees and expenses.
  • Founded in 1982, Electrograph generated revenues of approximately $150 million in the fiscal year ended July 31, 2004. Under the terms of the agreement, which was unanimously approved by the Manchester Board of Directors, Manchester shareholders will receive $6.40 per share in cash for each share they currently own.
  • Following completion of the transaction, the Company will operate as a private enterprise under the name Electrograph Systems, Inc. Alan Marc Smith, the former President and Chief Executive Officer of Westcon Group, Inc., a value-added distributor of networking and communications equipment, will invest alongside Caxton-Iseman in the transaction and become Chief Executive Officer of Electrograph. Sam Taylor, President of Electrograph, will remain in his position and will also invest in the transaction.
  • Robert A. Ferris, a Managing Director of Caxton-Iseman, said: Electrograph is an ideal platform from which to capitalize on the dramatic growth in the market for plasma and LCD display solutions for professional, commercial and high-end consumer users. As the market for these products expands in the coming years, we believe that manufacturers will come to rely more heavily on value-added distributors that have a unique ability to reach the markets integrators, resellers and their end customers.
  • Electrograph has built exceptional relationships with its vendors and customers, including designers of fully integrated audio-visual systems. As such, the business is well positioned to enter new complementary product areas and geographies through both organic growth and acquisitions.
  • We are pleased to partner in this transaction with Alan Marc Smith, who has a great track record in the value-added technology distribution sector. As CEO of Westcon he was responsible for the companys dramatic growth and continued success through the industry downturn. We are confident that Alan and Sam Taylor, who has done a great job as president of Electrograph over the past decade, will be an effective leadership team as Electrograph seeks to pursue a number of attractive growth opportunities as an independent company, Mr. Ferris concluded.
  • Barry R. Steinberg, Chief Executive Officer of Manchester, said: Im delighted to announce this transaction with Caxton-Iseman, which will provide significant value to our shareholders. Im very proud of the service we have provided our customers and how we have represented our vendors over the past 33 years. They will be in good hands with the new ownership group.
  • Taylor said: This transaction with Caxton-Iseman is a positive development for Electrograph, and our vendors, customers and employees. Under new ownership we will continue our tradition of value-added distribution for our customers. Electrograph will offer the best selection of large format displays and associated peripherals as well as the highest level of service and support in our industry. Concurrently, we will actively pursue new ways to add value for our business partners.
  • Smith said: I am pleased to participate in Caxton-Isemans acquisition of Electrograph and to lead the business under its ownership. Caxton-Iseman is a great strategic and financial partner to management teams and has consistently created value for company stakeholders. I look forward to working with the Caxton-Iseman team, Sam Taylor and the Electrograph team to achieve our shared business objectives.
  • Mr. Smith was CEO of Westcon Group, Inc. from 2001 to 2004, during which time he oversaw the growth of the company from $200 million in revenues to more than $2 billion, and from 120 employees to more than 1,200. As CEO he managed 8 acquisitions and 24 subsidiary integrations in 16 countries. Mr. Smith served as Executive Vice President and Chief Operating Officer of Westcon Group from 1998-2001 and Director of Business Development and Planning from 1997 to 1998.
  • Completion of the transaction, which is expected to occur in the third quarter of calendar year 2005, is subject to approval by the Companys shareholders, expiration of the applicable waiting period under the Hart-Scott-Rodino Act, completion of debt financing and customary closing conditions. Mr. Steinberg, who holds approximately 56% of the Companys outstanding shares, has agreed to vote his shares in favor of the transaction.
  • Caxton-Iseman has received a commitment from Antares Capital Corporation to provide a senior credit facility to help fund the transaction.
  • More information about the Manchester and Electrograph can be obtained by visiting their websites located at www.e-manchester.com and the website of its subsidiary at www.electrograph.com.