Systemax Inc. (NYSE:SYX) Files An 8-K Entry into a Material Definitive Agreement

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Systemax Inc. (NYSE:SYX) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01

Entry into a Material Definitive Agreement.
On March 24, 2017, certain wholly owned subsidiaries of Systemax
Inc. (the Company) executed a definitive securities purchase
agreement (the Purchase Agreement) with certain special purpose
companies formed by Hilco Capital Limited (Hilco and together
with its management team partners, Purchaser). to the Purchase
Agreement, Purchaser acquired all of the Companys interests in
Systemax Europe SARL, which includes its subsidiaries, Systemax
Business Services K.F.T., Misco UK Limited, Systemax Italy
S.R.L., Misco Iberia Computer Supplies S.L., Misco AB, Global
Directmail B.V. and Misco Solutions B.V. (collectively, the SARL
Businesses). The transaction closed immediately upon execution of
the Purchase Agreement.
The Company retained its France technology value added reseller
business, which is conducted through its subsidiary, Inmac Wstore
S.A.S., which was not part of the sale transaction.
The SARL Businesses were sold on a cash-free, debt-free basis;
proceeds were nominal. As part of the transaction, the Company
retained a small residual equity position in the Purchasers
acquiring entity, and will provide limited transition services to
Purchaser for a limited period of time under a transition
services agreement typical for transactions of this kind.
The parties to the Purchase Agreement made customary
representations, warranties and covenants, and agreed to
indemnification obligations appropriate for the nature of the
transaction. The Purchase Agreement contains representations,
warranties and covenants made to, and solely for the benefit of,
the parties thereto. The statements embodied in the
representations and warranties are subject to qualifications and
limitations agreed by the parties in connection with negotiating
the terms of the agreement. In addition, certain representations
and warranties were made as of a specified date, may be subject
to a contractual standard of materiality different from those
generally applicable to investors, or may have been used for the
purpose of allocating risk between the parties rather than
establishing matters as facts. Investors are not third party
beneficiaries under the Purchase Agreement and should not rely on
the representations, warranties and covenants or any descriptions
thereof as characterizations of the actual state of facts or
condition of the Company, the SARL Businesses or Purchaser.
The foregoing description does not purport to be complete and is
qualified in its entirety by reference to the Purchase Agreement,
a copy of which is filed as an exhibit to this Form 8-K, and
incorporated herein by reference.
Item 2.01
Completion of Acquisition or Disposition of Assets.
The information contained under Item 1.01 of this Current
Report on Form 8-K is incorporated herein by reference.
Item 2.05
Costs Associated with Exit or Disposal Activities.
In connection with the sale of the SARL Businesses, the Company
anticipates that one time exit charges will aggregate between
$1.0 and $1.5 million, including between $0.5 and $0.6 million
in severance costs, $0.4 and $0.6 million in professional fees
and $0.1 and $0.3 million in contract cancellation costs.
Item 8.01
Other Events.
On March 27, 2017, the Company issued a press release announcing
the sale of the SARL Businesses. A copy of this press release is
attached hereto as Exhibit 99.1 and is incorporated herein by
reference.
Item 9.01
Financial Statements and Exhibits.
(b) Pro forma financial information
The following Unaudited Pro Forma Condensed Consolidated
Financial Information related to the sale of the SARL Businesses
is attached as Exhibit 99.2 to this Form 8-K and incorporated by
reference into this Form 8-K:
(i) Unaudited Pro Forma Condensed Consolidated Balance Sheet as
of December 31, 2016;
(ii) Unaudited Pro Forma Condensed Consolidated Statements of
Operations for the year ended December 31, 2016;
(iii) Unaudited Pro Forma Condensed Consolidated Statements of
Operations for the year ended December 31, 2015; and
(iv) Unaudited Pro Forma Condensed Consolidated Statements of
Operations for the year ended December 31, 2014.
Exhibit
Number
Description
2.1
Securities Purchase Agreement
99.1
Press release dated March 27, 2017
99.2
Unaudited Pro Forma Condensed Consolidated Financial
Information


About Systemax Inc. (NYSE:SYX)

Systemax Inc. is a direct marketer of brand name and private label products. The Company’s segments include Industrial Products Group (IPG), EMEA Technology Products Group (EMEA), and Corporate and Other (Corporate). IPG sells a range of maintenance, repair and operations (MRO) products, which are marketed in North America. The Company offers a range of products that are manufactured for its own design and marketed under the brands: Global, GlobalIndustrial.com, Nexel Relius, Relius Elite and Hercules. Its EMEA segment primarily sells information and communications technology (ICT) and consumer electronics (CE) products. These products are marketed in Europe and are manufactured by other companies. MRO products offered by its IPG segment include electrical and bulbs, fasteners and hardware, storage and shelving, and tools and instruments. ICT products offered by its EMEA segment include computer components and accessories, and software. CE products include audio and cell phones.

Systemax Inc. (NYSE:SYX) Recent Trading Information

Systemax Inc. (NYSE:SYX) closed its last trading session down -0.32 at 10.96 with 63,369 shares trading hands.