December 21st, 1999

[4:30 PM] Mac Warehouse Bought Out By Group Led By Apple Board Member by Staff Long time Mac retailer Micro Warehouse, the parent company of Mac Warehouse, has agreed to be bought out by an investment group, according to a report from Reuters. Interestingly, the investment group is being headed by former IBM exec and current Apple Board Member, Jerome York. In addition to Mr. York, the investment group includes luminaries such media mogul, Michael Ovitz. According to the report from Reuters: The terms of the deal to buy the Norwalk, Conn.-based computer products direct marketer call for shareholders to receive $19 in cash for each share, a 44 percent premium over the stock's slumping average price over the past 30 days. In addition to York, who has been working for Kirk Kerkorian's hotel company, Tracinda Corp., the investor group is led by Gary Wilson, chairman of Northwest Airlines Corp., and investment firm Freeman Spogli & Co. Inc. Under an agreement unanimously approved by the Micro Warehouse board, a cash tender offer will begin within 5 business days for all Micro Warehouse shares and the acquisition is expected to be completed by the end of January. The buyout plan calls for Micro Warehouse cofounder Peter Godfrey to be replaced by York as chairman and chief executive. York was the well-respected chief financial officer of IBM in the mid-1990s. Additional investors include Boyer, Alfred Checchi, former cochairman of Northwest Airlines and a former candidate for governor of California, and Hollywood power broker Michael Ovitz. Once the transaction is complete, a new seven member-board of directors will be established that includes York, Wilson, Boyer, Checchi and three representatives of Los Angeles-based Freeman Spogli. The Mac Observer Spin: The mail order powerhouses such as Mac Warehouse were the only place for many Mac users to get the hardware and software they were looking for during some of Apple's darkest days. Mac Warehouse is no longer the majority of Micro Warehouses business, with the PC side (called Micro Warehouse) having eclipsed their Mac offerings during recent years. It will be very interesting to see how the company's Mac division will fare under the leadership of an Apple Board Member. Mr. York is a highly respected industry executive whose appointment to Apple's Board was heralded by industry analysts. Mail order operations have taken a hit from online competition which moves faster than a catalog based operation can. That said, Micro Warehouse has a successful online presence of their own. Mac Warehouse