Front Page
Aug. 6, 2002
Third Time's the Charm for Logistics Buy
After two earlier attempts to secure a buyer in its Chapter 11 bankruptcy case, Software Logistics was finally purchased by CMGI Inc. for $44 million.
After two earlier attempts to secure a buyer in its Chapter 11 bankruptcy case, Software Logistics was finally purchased by CMGI Inc. for $44 million.
The sale, approved by a bankruptcy judge in San Francisco, closed July 11.
Fremont-based Software Logistics, a supply chain management company that operates under the name iLogistix, was represented by Bay Area insolvency counsel Peter Benvenutti of Heller Ehrman White & McAuliffe.
With an eye towards liquidation, Benvenutti says Software Logistics immediately began looking for a buyer upon filing for bankruptcy protection in March 2001.
After a year of searching, Zomax Inc. offered $32 million for the bankrupt company in February. Zomax backed out of the deal before closing.
Software Logistics resumed its search for a buyer and emerged in May with a $32 million offer from Synnex Information Technologies Inc.
"We went to court to seek approval without an auction," Benvenutti says, hoping that the company could close the deal with Synnex as quickly as possible.
But a competing offer from CMGI Inc., an investing holding company in Boston, pushed up the price by several million dollars, Benvenutti says. The creditors' committee backed CMGI's offer because of the higher cash value.
With dueling bids, the bankruptcy judge ordered a June 10 auction, with Synnex surfacing as the winner with a bid of $42 million, Benvenutti says. Synnex then backed out of the deal and agreed to allow CMGI to acquire the company.
The lawyers involved in the deal won't say why Synnex changed its mind.
"It was a business decision," says Synnex's counsel, Jeffrey Garfinkle of Brobeck, Phleger & Harrison.
Software Logistics obtained court approval of the sale to CMGI on July 10, and the deal closed the next day.
Stefanie Knapp
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