PC Connection Wins Bidding For Amherst's Assets

After two weeks of competitive bidding, PC Connection (No. 46 on the 2005 VARBusiness 500) beat out ePlus (No. 122) for assets of Amherst Technologies (No. 144), a solution provider headquartered in Manchester, N.H.

Amherst, which recorded more than $200 million in revenue for 2004, filed for Chapter 11 bankruptcy in July, but was recent moved into Chapter 7 liquidation by U.S. Bankruptcy Court. According to documents obtained by VARBusiness, Amherst was placed in Chapter 11 after coming to the conclusion that it had "very little cash on hand," an amount that was "not enough to permit [Amherst] to sustain their business operations." Court documents revealed that Amherst owed IBM Credit nearly $40 million from an agreement that dated back to October 1999.

Last week, however, U.S. Bankruptcy Court Judge J. Michael Deasey approved a motion from IBM Credit to move Amherst into Chapter 7 liquidation and appointed a trustee to oversee the sale of the company's assets. EPlus, headquartered in Herndon, Va., announced on Oct. 13 that it signed a letter of intent to purchase the operating assets of Amherst for approximately $2 million and some assumed debt, and stated the acquisition was expected to close within two weeks. Yet less than two weeks later, ePlus issued a statement saying the transaction "was not consummated."

Instead, PC Connection, based in Merrimack, N.H., emerged as the victor, paying $7.751 million for assets that included all of Amherst's customer relationships and related intangibles, intellectual property and miscellaneous furniture, equipment and other fixtures. Most of the acquired assets will temporarily retain the name Amherst Technologies and operate as a division within PC Connection's MoreDirect subsidiary, while the rest of the assets will be dispersed to other parts of PC Connection.

"I think we won the deal because, as far as IBM Credit was concerned, we offered the highest bid," says PC Connection executive vice president Robert Wilkins. "We've talked with Amherst many times over the past five years, but we were never able to work out a deal until now. For us, it was a good move because we knew a lot of the Amherst people and had good relationships with them, and we were a known quantity for Amherst as well."

Wilkins says the Amherst acquisition brings complementary business and employees to the solution provider. Wilkins says Amherst has large customers that rely more heavily on high-end technology solutions, such as Unix-based servers and enterprise storage. In addition, Wilkins says PC Connection plans to hire all of Amherst's engineering staff; doing so will add a number of high-level technical certifications from such vendors as Cisco Systems, Hewlett-Packard and IBM. PC Connection is continuing to interview Amherst employees to decide how many additional people the solution provider will take on. Meanwhile, PC Connection will take Amherst's offices in Manchester, N.H., and Dallas, El Paso and Houston, Texas.