Cyberian Outpost’s Outpost.com , an Internet
retailer of high-end consumer technology products, will acquire CMPExpress, a privately held online
retailer of technology products to the business market, in a $12 million,
all-stock deal.
The move gives Outpost.com, which has seen its stock drop into the $3 range
from an all-time high of over $45, a foothold in the B2B market. Outpost was
trading at $4.75 at mid-day.
The transaction will be immediately accretive to earnings and is expected to
close within a week, Outpost said.
CMPExpress, which has been selling on the Web since 1996, has offices in Toms
River, NJ and Brookhaven, PA. The company had sales of $42 million in 1999
and, with a current average order size in excess of $1,100, generated sales
of approximately $40 million in the first eight months of this year.
“This acquisition represents a terrific opportunity for Outpost.com that will
generate positive earnings immediately, as well as positive cash flow,” said
Bob Bowman, president and chief executive officer of Outpost.com. “We
currently have a highly successful B2C business and an electronic Business
Services division that includes clients like Brookstone, Tweeter and Wolf
Camera. Combining these businesses with an established B2B group with an
outstanding reputation like CMPExpress, gives Outpost.com three strong
business components.”
The B2B business will be called OutpostPRO, and Bowman predicted it would
exceed $100 million in sales by fiscal year-end.
The revenue certainly will be needed; Outpost has reported four quarterly
losses in a row and the current consensus of analysts is that the quarter
ending in August will see the company reporting another loss, of 26 cents a
share, according to ThomsonInvest.net.
Bryn Kaufman, CMP founder, was named vice president for Technology for
Outpost.com’s new B2B operations, reporting to Raymond Karrenbauer, chief
technology officer for Outpost.com. Outpost.com’s existing B2B business will
be merged into CMPExpress and the combined business will now represent
approximately 25 percent of Outpost’s total sales.
Outpost.com Acquires CMPExpress
