Computerland Merisel Reach Franchise Pact

NEW YORK - Computer wholesaler Merisel Inc. reached a preliminary agreement yesterday to acquire the franchise operations of ComputerLand Corp. for up to $110 million.

The deal would likely boost Merisel's roughly $2.3 billion in annual revenues by $1 billion, making it the world's largest distributor of small computers, surpassing Ingram Micro Inc.

It also marks another big step in the restructuring of ComputerLand, one of the biggest names in computer retailing. With this deal Computerland will now solely offer computer services and products to very large companies.

And it illustrates how a shakeout in the personal computer industry, most notable in the financial difficulties and mergers of manufacturers, has also affected wholesalers.

Similar acquisitions have occurred on a smaller scale this summer as distributors have tried to improve their market reach and range of product expertise.

"The manufacturing side and reselling side is maturing and this is all part of the evolution," said Robert DeMarzo, executive editor of Computer Reselling News, a trade publication.

ComputerLand's name is on more than 230 franchised stores in the U.S. It also sells computers through nearly 500 other resellers.

The purchase also gives Merisel the ComputerLand name in the United States, allowing the franchisees to keep their identity.

"I think it's probably the best known name of all the stores on a nationwide basis," said Bob Leff, co-chairman of Merisel.

Meanwhile, the continuing part of ComputerLand, which will be renamed, for the next several years will provide warehousing, purchasing, distribution and other services for the operations Merisel is buying.

Stock in El Segundo, Calif.-based Merisel closed up 87.5 cents at $15.625 in over-the-counter-trading yesterday. ComputerLand is privately held and based in Pleasanton, Calif.

Executives of the companies said they hope to close the deal by the end of the year.