Microamerica, Softsel to Merge in Stock Swap

Inglewood-based Softsel Computer Products said Wednesday that it has agreed to acquire Microamerica in a stock swap deal that would create one of the nation’s largest distributors of personal computer products.

The combination of Softsel and Microamerica, a Massachusetts firm, would form a company roughly the size of Ingram Micro D, the nation’s largest wholesaler of PC products. Ingram Micro D was formed in March when Nashville-based Ingram Industries purchased Micro D, a PC products distributor based in Santa Ana.

The deal, valued at about $91 million, reflects intensified competition in the $4-billion-a-year PC distribution business, particularly in the wake of the Ingram-Micro D merger. And it also demonstrates PC manufacturers’ growing use of distributors to get their products into the hands of retailers and other customers.

“We think the combined entity will be a much better company with the strength to meet the competition, which is very tough,” said Robert Muccini, Microamerica’s chief financial officer. “There has been tremendous price pressure” within the industry since the merger of Ingram and Micro D, he said.

Directors of Softsel and Microamerica approved the merger, which must get final approval from each companies’ shareholders. The companies said they expect the deal to be completed in the first quarter of 1990.

James L. Brill, Softsel’s chief financial officer, said the companies’ domestic and international operations are complementary and there is little overlap between their customers and products.

Distributors act as the middlemen between PC manufacturers and retailers and resellers. Manufacturers rely on distributors to move products on to store shelves faster and more efficiently, using their own shipping networks, financing programs and sales and marketing forces.

During the past 12 months, Softsel and Microamerica have had combined sales of about $1.1 billion. For the nine months ended Sept. 30, Softsel posted earnings of $6.9 million on revenue of $441.3 million. For the same nine-month period, Microamerica earned $5.2 million on revenue of $383.6 million.

The agreement calls for Microamerica to be merged into a wholly owned subsidiary of Softsel.