Merisel plans redemption of $17.5 million convertible preferred stock

Deal with Phoenix includes $3.5 million cash, 140,000 new preferreds

By Toni Weeks

San Diego, Jan. 19 - Merisel, Inc. has entered into an agreement with Phoenix Acquisition Co. II, LLC for the redemption of Merisel's outstanding convertible preferred stock, according to a press release.

Of the $17.5 million redemption price, $3.5 million will be cash and the remainder will consist of the issuance of 140,000 shares of a new series A preferred stock at $100 per share. The preferreds will have a six-year term and carry a 12% cumulative dividend, payable in cash and in new shares of series A preferreds.

The agreement, which will reduce $20.6 million of the company's outstanding preferred stock, also stipulates that for two years following the closing date, any buyer of Phoenix's common or preferred stock in Merisel must offer at least $1.25 per share during any tender offer.

"The company has reported strong revenue growth along with operating income in each of the second and third quarters of 2010," Donald R. Uzzi, Merisel's chairman and chief executive officer, said in the press release. "These ongoing improved results have created the right environment for a transaction such as this to be completed."

Merisel is a New York visual communications solutions company.

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