Untangling The Wires At Microage

Shares of MicroAge (MICA) have been on the ropes, partly because of disappointing earnings. Its stock has tumbled--to 14 1/4 a share on Aug. 12, down from 29 last September. But MicroAge will perk up, say several pros. For one, earnings should rebound. But more important: They expect this integrator and distributor of info-tech products and services to unload its Pinacor unit, which distributes products to resellers.


On Apr. 13, when MicroAge was mentioned in this column, Chairman Jeff McKeever said he was considering all options--including selling the distribution business--to boost the stock. Since then, he has split MicroAge, with expected sales of $5.5 billion to $6 billion in the fiscal year ending Oct. 31, 1998, into two units: MicroAge Integration, which provides and installs systems, and Pinacor.

Now, a deal looks set for the sale of Pinacor, expected to post sales of $4.5 billion this year, to CHS Electronics, for $650 million in cash and stock. That translates into $32 a share in MicroAge stock. CHS distributes minicomputer products.

Analysts forecast profits of $1.09 in 1999, as demand for info-tech resurges, vs. an expected 24 cents loss in fiscal 1998. MicroAge spokeswoman Michelle Gorel says the company is considering all options for Pinacor. CHS CEO Claudio Osorio was unavailable for comment.

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